Stock futures are off the worst levels after a positive morning in Asia and Europe. The US stock market will open on a high note on Wednesday, as earnings reports and positive corporate tax news push stocks higher. The S&P […]
Stock futures are off the worst levels after a positive morning in Asia and Europe. The US stock market will open on a high note on Wednesday, as earnings reports and positive corporate tax news push stocks higher. The S&P 500 index will begin its daily ramp higher at 8:36 a.m. ET, while the S&P 500 futures are flat.
While stock futures are not a perfect predictor of the cash market, they try to anticipate the direction of cash equities, and then play catch-up when the latter overshoot. The stock market’s recent volatility was partly due to a raging battle over the replacement of Justice Ruth Bader Ginsburg. The GOP is demanding that the replacement be selected before the November election because this would ensure a conservative Supreme Court for decades.
On the other hand, FIIs are trying to seduce domestic retail investors with their bearish view. Despite this, they continue to build positions in stock futures. Earlier, in May, they were holding 500,000 contracts in stock futures. Today, they’re holding nearly four million contracts. While that’s great news for retail investors, it’s also a dangerous position to be in – if prices begin to plummet, a high proportion of FIIs may turn into a millstone.
Single stock futures trading will continue to expand. Eurex will offer futures contracts on 370 single stocks from 13 European countries. The range of available contract months will also expand to three years, which will provide more opportunities for portfolio optimization. This new market will be available to institutional traders soon. These single stock futures are the future of the market, so don’t miss out.
Investors are using stock futures for speculation and hedging. For example, an investor who has exposure to technology stocks may sell Nasdaq 100 futures to buy E-mini S&P 500 futures. Similarly, if a market dip occurs in the US stock market, an investor may consider selling Nasdaq 100 futures.
If an investor is interested in trading stock futures, they should know that the market is dominated by professional traders. Professional traders are also heavily involved in cash equity trading, which involves buying and selling mutual funds, buying and selling stocks. A stock futures contract is traded on margin. This means that investors are required to put up a certain amount of money as margin. However, the brokerage will set the margin amount for each contract.
The futures market works much like a traditional stock market. It is based on an underlying asset, and the prices of stock futures are based on it. It is also possible to trade index futures with micro E-mini contracts. The contract is a legally binding contract that enables traders to speculate on the price movement of a financial index.