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How does one use an index future?
An index future is a "cash-settled futures contract on the value of a particular stock market index". Index futures are used in investments, trading, and hedging.
How is Standard and Poors 500 Index's Fair Value calculated?
Since futures contracts on a market index expire only once a month, Fair Value is the Forward Value (at the time of a futures contract expiration) of an index spot price, where compounding takes into account time to expiration and dividends lost due to holding index futures rather than underlying stocks. If Fair Value before the open is lower than the futures contract price, you may expect that a market index will go higher after the opening bell.
What statement best explains what a futures contract is?
A futures contract is a contract setting the price and date for a commodity purchase.
How do you purchase a futures contract?
You purchase a futures contract by first opening a futures trading account, which is a margin account, with a futures broker. Once that is done, simply choose the specific futures contract you wish to buy and then pay its "Initial Margin", which is a deposit needed to start a futures trade.
What type of company is the Commodity Futures market?
there are two types that are part of the commodity futures market. A normal futures market is one where the price of the nearby contract is less than the price of the distant futures contract. The other is an inverted futures market, the price of the near contract is greater then the price of the distant contract.
What is Standard and Poor's 500 e mini?
E-mini is a stock market index futures contract traded on the Chicago Mercantile Exchange. The notional value of one contract is US$50 times the value of the S&P 500 stock index.
How many bushels of wheat in a futures contract?
A wheat futures contract covers 5000 bushels of whatever wheat (there are different kinds) is specified in the contract.
What type of market is the commodity market?
there are two types that are part of the commodity futures market. A normal futures market is one where the price of the nearby contract is less than the price of the distant futures contract. The other is an inverted futures market, the price of the near contract is greater then the price of the distant contract.
Hedging with index futures means?
Hedging is the process of minimizing the risk to an investor's portfolio by minimizing their exposure to stock volatility. Index futures are the act of investing through an obligation to purchase or sell a product by a certain date. Hedging with index futures is the act of trying to minimize the investor's exposure to the volatility of futures.
Where can one find more information about stock index futures?
You can find a lot of information on stock index futures from newspapers, financial magazines, on TV news, and online. You can easily go online and go to Google finance or CNBC and look at the stock index futures.
What has the author B Thomas Byrne written?
B. Thomas Byrne has written: 'The Stock Index Futures Market' -- subject(s): Stock index futures
What is stock and index futures?
Bets on future prices.
