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 ?
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.
In the case of a stock index future, speculatorsbet that a group of stocks is going to go up or down in value.
The Saudi Stock Exchange (Tadawul) is expecting share listings to pick up next year while the launch of stock index futures should smooth an influx of money from overseas, reported Reuters .
The MSCI AxJ Futures will be HKEXs first regional stock index futures and will be launched on Monday, 11 June 2018.
and European stock index futures. The Nikkei 225 gained by 0.8%, while S&P 500 futures were showing a 1.1% advance.
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.
The basis of CSI 300 stock index futures is the difference between the CSI 300 spot index and futures index and plays an important role in the information transfer of the capital market.
China CSI300 stock index futures for January rose 0.6 percent, to 3,224, 1.3 points below the current value of the underlying index.
As a powerful financial tool, stock index futures can help curb abnormal stock market fluctuations and effectively avoid investment risk by virtue of the primary functions of price discovery, hedging, and arbitrage; moreover, this tool is widely used in both developed and developing countries.
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.