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.
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.
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