Single Stock Future Tips
Single Stock Future Tips are contracts between two investors. The buyer promises to pay an individual price for 100 shares of a single stock at a predetermined future point. The seller promises to send the stock at the specified price on the specified future date. Read on to learn all about single stock futures and find out whether this investment vehicle could work for you.
History:
Stock Futures on individual equities have been traded in England and several other countries for some time, but in the United States, trading in these instruments was prohibited until recently. In 1982, an agreement between the chairman of the U.S. Securities and Exchange Commission (SEC), John S.R. Shad, and Philip Johnson, chairman of the Commodity Futures Trading Commission (CFTC), banned the trading of futures on individual stocks. The Shad-Johnson Accord was ratified by Congress in the same year. Although the accord was originally intended to be a temporary measure, it lasted until Dec. 21, 2000, when President Bill Clinton signed the Commodity Futures Modernization Act (CFMA) of 2000.
Under the new law, the SEC and the CFMA worked on a jurisdiction-sharing plan, and SSFs began trading in November 2002. Congress authorized the National Futures Association to act as the self-regulatory organization for the security futures markets.
The Markets:
Initially, Single Stock Futures began trading in two U.S. markets: OneChicago and the NQLX. In June 2003, however, Nasdaq transferred possession of its stake in the NQLX to the London International Financial Futures and Options Exchange (LIFFE). Then, in October 2004, the NQLX consolidated its contracts with those of OneChicago, leaving that organization as the primary trading market for Single Stock Future Tips.
The Options Clearing Corporation or the Chicago Mercantile Exchange (owned by CME Group) clears trades in SSF contracts. Trading is fully electronic through either the Mercantile Exchange's GLOBEX® system or the Chicago Board of Options Exchange's system called CBOEdirect®.
The Single Stock Futures Contract:
Each Single Stock Future contract is standardized and includes the following basic specifications:
• Contract Size: 100 shares of the underlying stock
• Expiration Cycle: Four quarterly expiration months - March, June, September and December.
Additionally, two serial months are the next two months that are not quarterly expirations.
• Tick Size: 1 cent X 100 shares = $1
• Trading Hours: 8:15 a.m. to 3 p.m. CST (on business days)
• Last Trading Day: Third Friday of the expiration month
• Margin Requirement: Generally 20% of the stock's cash value
The contract terms call for stock delivery by the seller at a specified future time. However, most contracts are not held to expiration. The contracts are standardized, making them highly liquid. To get out of an open long (buying) position, the investor simply takes an offsetting short position (sells). Conversely, if an investor has sold (short) a contract and wishes to close it out, he or she buys (goes long) the offsetting contract.
Interested in Upcoming Stocks Contract and stock cash tips, stock future tips Call @09707112112 or visit - http://www.tradebizzindia.com/
Single Stock Future Tips are contracts between two investors. The buyer promises to pay an individual price for 100 shares of a single stock at a predetermined future point. The seller promises to send the stock at the specified price on the specified future date. Read on to learn all about single stock futures and find out whether this investment vehicle could work for you.
History:
Stock Futures on individual equities have been traded in England and several other countries for some time, but in the United States, trading in these instruments was prohibited until recently. In 1982, an agreement between the chairman of the U.S. Securities and Exchange Commission (SEC), John S.R. Shad, and Philip Johnson, chairman of the Commodity Futures Trading Commission (CFTC), banned the trading of futures on individual stocks. The Shad-Johnson Accord was ratified by Congress in the same year. Although the accord was originally intended to be a temporary measure, it lasted until Dec. 21, 2000, when President Bill Clinton signed the Commodity Futures Modernization Act (CFMA) of 2000.
Under the new law, the SEC and the CFMA worked on a jurisdiction-sharing plan, and SSFs began trading in November 2002. Congress authorized the National Futures Association to act as the self-regulatory organization for the security futures markets.
The Markets:
Initially, Single Stock Futures began trading in two U.S. markets: OneChicago and the NQLX. In June 2003, however, Nasdaq transferred possession of its stake in the NQLX to the London International Financial Futures and Options Exchange (LIFFE). Then, in October 2004, the NQLX consolidated its contracts with those of OneChicago, leaving that organization as the primary trading market for Single Stock Future Tips.
The Options Clearing Corporation or the Chicago Mercantile Exchange (owned by CME Group) clears trades in SSF contracts. Trading is fully electronic through either the Mercantile Exchange's GLOBEX® system or the Chicago Board of Options Exchange's system called CBOEdirect®.
The Single Stock Futures Contract:
Each Single Stock Future contract is standardized and includes the following basic specifications:
• Contract Size: 100 shares of the underlying stock
• Expiration Cycle: Four quarterly expiration months - March, June, September and December.
Additionally, two serial months are the next two months that are not quarterly expirations.
• Tick Size: 1 cent X 100 shares = $1
• Trading Hours: 8:15 a.m. to 3 p.m. CST (on business days)
• Last Trading Day: Third Friday of the expiration month
• Margin Requirement: Generally 20% of the stock's cash value
The contract terms call for stock delivery by the seller at a specified future time. However, most contracts are not held to expiration. The contracts are standardized, making them highly liquid. To get out of an open long (buying) position, the investor simply takes an offsetting short position (sells). Conversely, if an investor has sold (short) a contract and wishes to close it out, he or she buys (goes long) the offsetting contract.
Interested in Upcoming Stocks Contract and stock cash tips, stock future tips Call @09707112112 or visit - http://www.tradebizzindia.com/
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