Stock Futures / Index & Market Futures


The most basic difference between stock futures, index futures and market futures is their underlying class of securities.

More About Stock Futures / Index & Market Futures

Continue reading to learn more about:

What is the difference between index futures and stock futures?
What is the future stock market?
Is it possible to trade stock index futures?
What are market futures doing right now?


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What is the difference between index futures and stock futures?


Index futures and stock futures are two different types of investment vehicles that allow investors to profit from the movements of an index or individual stocks. Indexes are collections of stocks, similar to mutual funds, only they trade on a futures exchange such as the Chicago Board of Trade (CBOT) or Chicago Mercantile Exchange (CME). Individual stock futures, a type of security derivative, allow traders to make bets on the future performance of an individual stock.


 
 

What is the future stock market?


The stock futures market is a method of trading shares without owning them, promising to deliver them at some point in the future. Investors can sell or buy futures contracts based on stock indexes and individual companies, which are valuable for hedging investments or for speculating about prices. With the stock futures market, traders can just pay a small amount up front, known as the margin requirement, to hold their position until the contract expires.

 

Is it possible to trade stock index futures?

Stock index futures are contracts that allow an investor to trade the stock market. They do not actually involve buying shares of stock. These are made available through a centralized exchange, where traders make bids and offers for investments that can be bought and sold globally.

What are market futures doing right now?

The futures market tells you what the stock market is going to do by trading the contracts of stocks that are most likely to be stocks, commodities or indexes. Trading futures is a way of investing in the direction of a market. By trading the same stocks, you get a much better idea of which direction the market will go next.