Stock Index Future

Stock Index Future

A security that uses composite stock indexes to allow investors to speculate on the performance of the entire market, or to hedge against losses in long or short positions. The settlement of the contracts is in cash.

Stock Index Future

A futures contract on a stock index. In a stock index future, the counterparties agree to trade the underlying index at a certain time for a certain price. Because it is impossible to physically deliver the index, stock index futures are settled in cash, especially if the underlying assets are indices. Financial futures may be traded like other futures.

stock index future

A contract for the future delivery of a sum of money based on the value of a stock index (in most cases, 500 times the index). Unlike other futures contracts, in which a given commodity is specified for delivery, stock index futures call for cash settlements, because it is not possible to deliver an actual index. This future can be used to speculate on the future direction of the stock market (rather than just a few stocks) or to hedge a portfolio of securities against general market movements. See also Section 1256 contracts.
References in periodicals archive ?
Based on the data in Table 1, the null hypothesis that the Chinese stock index future price series are nonstationary cannot be rejected under the condition of less than 10% significance.
The impact of stock index future trading, on the volatility of the underlying Nifty and Nifty Junior stock index market, is investigated by estimating a model for a period which covers the time before and after the introduction of stock index futures contracts.
Second, as pointed out by Eun and Shim (1989, 243), despite the nonsynchronous nature of the data employed, the results of VAR analysis based on the structure of time zone differences can still provide useful insights into the international transmission mechanism of stock index future market movements.
A stock index future is just like a port belly future, only instead of being a commitment to buy pork, it's a commitment to buy a "basket" of stocks.
And yet today's trader has to know precisely how to compare the cost of an ETF to the cost of the underlying basket, all the while needing to understand financing and volatility charges included in the price of a swap transaction and the richness/cheapness of roll risk in the calendar spread on the stock index future.
In the case of a stock index future, speculatorsbet that a group of stocks is going to go up or down in value.
As most regional markets slipped along with US stock index futures earlier in the day, institutions decided to take profit, which saw the index go into free-fall mid-day to hit intraday low by 708 points.
The exchange also rolled out the dynamic price banding mechanism designed to stabilize price fluctuations applicable to the spot month and next calendar month contracts of TAIEX and mini-TAIEX, and that is set to expand to other stock index futures in 2018.
stock index futures eased slightly in early trading on Sunday after Britain's vote to leave the European Union sparked a sharp sell-off in global markets on Friday, wiping out over $2 trillion from world equities.
US stock index futures were lower ahead of another round of earnings reports and after data showed the US trade deficit surged to its highest level in nearly 6-1/2 years in March.
Previously published under the title Security Analysis and Portfolio Management, this advanced textbook for a second investment course introduces Markowitz's model of portfolio selection and the arbitrage pricing theory, and applies the financial theories to commodity futures, stock index futures, and stock options.
China launched its Hushen 300 index, the first stock index futures to begin trading on the mainland, in April 2010.