What are Single Stock Futures or SSF?
Single stock futures or SSF are the futures contracts for a single company stock. They are standardized futures contracts usually for 100 stocks, with basic specifications like contract size, expiration cycle, tick size, market trading hours, last trading day, and margin requirement. The valuation of single stock futures are simpler than that of stock options, this make SSF a good option to all types of traders.
Trading single stock futures has many advantages over trading stock themselves such as more leverage, easy to go short (no waiting for uptick), and flexibility to speculates, spread, or hedge. But there is also some disadvantages like more risk, no stock right or dividends, higher chance for margin calls. Unlike stock options, single stock futures contracts have to be settled at the proposed time, and contract prices deviates largely with the underlying product. For stock options the only money you lose is that paid as option premium.
In United States, after the ban from 1982, the trading of single stock futures started in November 2000. The trades are done electronically in OneChicago market (CBOE, CME and CBOT markets together) and Nasdaq Liffe markets. Simple stock futures are not yet a favorite trading item for most traders. The daily trading volume is over 25,000 contracts per day.
Trading single stock futures has many advantages over trading stock themselves such as more leverage, easy to go short (no waiting for uptick), and flexibility to speculates, spread, or hedge. But there is also some disadvantages like more risk, no stock right or dividends, higher chance for margin calls. Unlike stock options, single stock futures contracts have to be settled at the proposed time, and contract prices deviates largely with the underlying product. For stock options the only money you lose is that paid as option premium.
In United States, after the ban from 1982, the trading of single stock futures started in November 2000. The trades are done electronically in OneChicago market (CBOE, CME and CBOT markets together) and Nasdaq Liffe markets. Simple stock futures are not yet a favorite trading item for most traders. The daily trading volume is over 25,000 contracts per day.
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