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Single-Stock Futures

Single-Stock Futures Definition

Single-stock futures (SSF's) are futures contracts with the underlying asset being one particular stock, usually in batches of 100. When purchased, no transmission of share rights or dividends occurs. Being futures contracts they are traded on margin, thus offering leverage, and they are not subject to the short selling limitations that stocks are. They are traded in various financial markets, including those of the United States, United Kingdom, Spain, India and others. South Africa currently hosts the largest single-stock futures market in the world, trading on average 700,000 contracts daily.

 


Additional meaning of Single-Stock Futures:

SSFs have yet to gain significant popularity among securities and derivatives traders in the United States. Daily total contract volume averaged approximately 26,000 contracts/day in December 2005. Although 2005 total annual volume did increase 188% over 2004, volumes are still small in comparison to more established derivative contracts. For example, U.S. equity & ETF options trade approximately 6,000,000 contracts/day.


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