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Security Futures is the term used to collectively describe futures on individual stocks, narrow-based indices, and exchange traded funds (ETFs). These products are now trading in the U.S. and represent an important new tool for professional traders. Security futures enable money managers, proprietary trading operations, and other investors to efficiently execute a variety of trading strategies for U.S. listed equities.

When a security future is traded, both the buyer and seller put up a good faith deposit called margin. Margin requirements are generally 20% of the cash value of contract, although this requirement may be lower if the investor also holds certain offsetting positions in cash equities, stock options, or other security futures in the same securities account.

FuturesTraining.com is proud to share these concise guides and single stock futures offerings from NQLX and OneChicago.

Single Stock Futures (SSF) are futures contracts on individual stocks. Initially, OneChicago list futures on 80 to 85 well-known stocks such as IBM, Qualcomm and Microsoft. In late 2000, the U.S. Congress passed legislation lifting the ban on these products, which were already trading in Europe and elsewhere.

A OneChicago single stock futures contract is an agreement for delivery of shares of a specific stock at a designated date in the future, called the expiration date. The size of a OneChicago single stock futures contract is 100 shares of the underlying stock.

Narrow-Based Indices are futures contracts on small groups of stocks that allow an investor to take a position in a concentrated area of the equities market. Each narrow-based index will typically include four to six companies in a specific sector. OneChicago will initially list at least 15 narrow-based indices on key economic sectors such as Aerospace, Banking, Biotechnology, and Semiconductors.

ETF Futures are futures contracts on exchange traded funds. They have similar characteristics to single stock futures, although the underlying security is the fund itself rather than common stock in a specific company. Thus at expiration, the deliverable assets are shares in the underlying ETF.

Single Stock Futures
Contract Specifications
Exchange Introduction
SSF Listings
Narrow-Based Indicies
NBI Listings
Expiration Dates
Settlement & Delivery
OneChicago Retail Package PDF
OneChicago Institutional Package PDF

NQLX is designed to take advantage of the change in the U.S. regulatory environment and the repeal of the Shad Johnson Accord, thus allowing U.S. customers to trade futures on individual stocks for the first time on U.S. regulated exchanges. The revolutionary new product marks a quantum leap in the range of investment opportunities available to both institutional and retail investors. Single stock futures make equity trading available to a wider audience therefore, delivering greater efficiencies and liquidity to the underlying market.

A stock futures contract is an agreement to buy or sell shares of individual companies some time in the future at an agreed upon price. SSFs also require reduced capital upfront compared to trading on the traditional cash market as the trader is only required to pay margin.

Therefore, capital investment only amounts to margin payable which frees up capital for other investments. SSFs allow traders to profit no matter what direction the market moves.

If a trader is bearish on the market, the trader can sell a contract, then make a profit by buying that contract back later when the price decreases. This may decrease the need and costs associated with stock borrowing. SSFs also allow investors to switch exposure from one stock to another without disturbing the underlying stock holding.

Single stock futures products traded on LIFFE are called universal stock futures (USF). These are standardized futures contracts based on shares of European and U.S. companies. LIFFE's USF market opened early in 2001 and the volume and open interest have grown at a steady rapid pace, proving international interest in trading single stock futures.

A listing of current and future NQLX products can be downloaded by clicking here

Considerations
Interest Rates
Issue Selection
Market Dynamics
Matched Pair
SSF Alpha Management

Steven Greenberg, CEO of Alaron Trading has written a remarkable book that can guide you along every step of the way.

Single Stock Futures, The Complete Guide by Steven A. Greenberg

"This book is an essential companion to single stock futures, from their historical background to the basic of futures trading. Read it to understand the strong rationale behind single stock futures and the reason why these instruments will shape and influence modern investment techniques."
-Max Butti, London International Financial Futures Exchange (LIFFE)

Trading in single stock futures is the most revolutionary development in the financial industry in many years. This, the first book on this fascinating topic, is the definitive guide to every aspect of single stock futures, covering all the basics of futures, options, margins, and the mechanics of order placement. The background developments leading to the beginning of trading, the exchanges where trading will take place, and trading considerations are all covered in depth.

The many advantages of trading single stock futures are clearly explained.

Order your copy of Single Stock Futures: The Complete Guide
for $29.95 plus $4.95 shipping and handling.

ALARON CLIENTS: purchase by deducting funds from your account

Security futures products are not suitable for all types of investors. You should contact Alaron Trading Corporation at (800) 542-1022 to obtain a copy of the required security futures products risk disclosure statement. There is a substantial risk of loss in trading futures and options. 1-31-02

Contact us for more information or call us : 1-800-542-1022
*There is a substantial risk of loss in trading futures and options. Your use of this website constitutes acceptance of the Alaron Privacy Policy.