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.
Index Futures Trading is simply buying or selling a specified quantity and quality of a financial instrument to be delivered or settled at a specified time in the future at a price determined at the time of purchase and sale.
You can trade stock index futures by paying a certain proportion margin of the contracts value, usually 8% to 10%. The margin leverage can enlarge your profit and loss.
There are identified quality、quantity、 delivery date 、location and payment time of the subject of the transaction in the contract except the price. Transactions can be done before the contract expires in the opposite direction to offset the original transaction obligations (the buyer pay, the seller delivery).
After the end of trade everyday, the Stock Exchange will clear the profit and loss, trade margin, fees and other costs of all contracts to increase or decrease the settlement reserve of members. So are Futures brokerage companies.
Futures contracts have specific expiration date, on that day the seller and the buyer must make delivery of the subject .And stock index futures is cash settlement. There is fixed cash value of units in Stock index futures contracts, such as the Pip Cost of HS300 Index Futures (4668.087, -56.46, -1.20%) is ￥300, it can be settled with ￥300 multiplied by the points when deliver.
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.
（1）It is margin transaction in Stock index futures but full of cash transactions in the stock.
（2）You can buy or sell stock index futures but buy the stock.
（3）It is a daily non-debt settlement in stock index futures, but the stock did not.
（4）It is high amount of investment、delivery time and cash settlement in Stock Index Futures. And the stock is low investment amount, no delivery time requirements.
（5）It can be mandatory closed positions in stock index futures, but the stock don not.
The price of stock index futures is depended on the stock index. These factors include:
A、Macroeconomic data, such as GDP, the industrial index, the inflation rate, etc.
B、Macroeconomic policies, such as raising interest rates, exchange rate reform and so on.
C、And various information of the constituent stocks of companies, such as the greater of the constituent stocks come into the market and add dividends;
D、International financial market movements, such as the changes of the NYSE's Dow Jones industrial average price and international crude oil futures market price
In addition, the stock index futures prices were effected by the length of time.
Stock Index futures price is close contact with the stock index changes. stock index futures price is expectation of the future price of, it makes a guiding role in the stock index.
Under normal circumstances, the stock index futures price and stock spot price changes in the same direction. Therefore, as long as investor open opposite positions in two markets, he can gain profit in one of the two markets.
The fundamentals is some basic factors affecting the trend of stock market. Fundamental analysis is to analyze such factors based on the theory to determine investment some stock, that is the basis of analysis in the shares investment.
The basic factors affecting the stock market, according to the nature of different factors can be divided into political, economic, social and psychological factors. The impact of different factors can be divided into macro and micro factors; according to different sources, there are domestic factors and international factors, and so on. Political factors is the factors affect the stability. Social and psychological factors mainly refers to factors affect people's psychological expectations. Economic factors include macroeconomic situation, the country's various policies, the development of listed companies and the trend of their stock "alternative" (bonds, funds, etc.). Under normal circumstances, the stock market is most closely linked with economic situation, and economic factors are also the strongest force on the stock market.
From a long-term and fundamental perspective, the trend of the stock market is depended by the country's economic development level, the stock market price fluctuations in line with the macroeconomic situation changes. In the period of economic prosperity, their stock prices rose. In the period of the economic downturn, stock prices keep falling. the stock price is known as macro-economic barometer
The interest rate is a more sensitive factor in the factors effecting the stock market. In general, interest rate rose may increase banks savings and business costs, that stock price will decline. Instead, lower interest rates, people can invest in the stock market to stimulate the stock prices rise.
This factor is the trend of the stock market both advantages and disadvantages to both stimulate the role of the market, have suppressed the role of the market, but the whole is more harm than good, it will push the stock market bubbles of the increase. In the early inflation, the monetary increase will help stimulate production and consumption, the growth rate of increase corporate profits and thus stock prices to rise. But inflation to a certain extent, will push interest rates higher and thereby facilitate the stock fell.
The quality of company place an impact on its stock price. The main factors including financial situation, business, management, technical capacity, market size, industry characteristics, development potential and so on.
It Refer to the political factors directly or indirectly affect the stock market, such as the international political situation, political events, relations between countries, the transformation of important leaders, and so on, these will place an tremendous and sudden impact on stock price.
Index Futures is traded through the oral outcry of Exchange in history. At present most Index Futures is traded through electronic system. When the investors input instructions that will be executed through the computer system.
When trade index futures the investors need to pay some money to guarantee, the money is called margin. To buy the contract means opening long position, To sell the contract means opening short position. The positions were daily settled. If you buy a contract then sell it ,that called close position. For example, if you sell 10 lots,then buy 20 lots the next day, that means you close positions 10 lots, the remain 10 lots is open positions.
| Product | SP500 | DowJonesIndustrialAverage | NASDAQ100 | FTSE-100 |
| Exchange | CME | CBOT | CME | LIFFE |
| Code | SP | DJ | ND | FTSE-100 |
| Min Fluctuation | 0.1point（$25） | 1point（$10） | 0.5point（$50） | 0.5point（5 GDP） |
| Contract Value | $250*SP | $10*DJ | $100*ND | 10GDP* FTSE-100 |
| Contract Months | March, June, September and December | March, June, September and December | March, June, September and December | March, June, September and December |
| Last Trading Day | The third Thursday of the contract month | The third Thursday of the contract month | The third Thursday of the contract month | The third Thursday of the contract month |
| Product | E-mini SP500 | E-mini DJ | E-mini NASDAQ100 | Nikkei-225 |
| Exchange | CME | CBOT | CME | STMEX |
| Code | ES | YM | NQ | SSI |
| Min Fluctuation | 0.25point（$12.5） | 1point（$5） | 0.5point（$10） | 5point（2500JPY） |
| Contract Value | $50*SP | $5*YM | $20*NQ | 500 JPY *SSI |
| Contract Months | March, June, September and December | March, June, September and December | March, June, September and December | March, June, September and December |
| Last Trading Day | The third Thursday of the contract month | The third Thursday of the contract month | The third Thursday of the contract month | The third Thursday of the contract month |
