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Narrow Based Indicies

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 three to nine companies in a specific industry sector.

A OneChicago narrow-based index futures contract is an agreement to deliver shares of the underlying stocks at a designated date in the future, called the expiration date. At all times, four expiration dates will be available for trading OneChicago narrow-based indices. OneChicago narrow-based indices are physically settled at expiration.

Using these indices, investors can take a long or short position in a concentrated basket of stocks without incurring multiple transaction fees.

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.

No uptick is required to establish a short position in OneChicago's products. Short sellers may also benefit from eliminating the costs and inefficiencies associated with the stock loan process.

See OneChicago's NBI Listings

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