Introduction to Single Stock Futures:

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.

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All you need to know about stock futures:

A stock futures contract is an agreement between two parties – a buyer and a seller – where in the former agrees to purchase from the latter, a fixed number of shares or an index at a specific time in the Stock future for a pre-determined price. These details are agreed upon when the transaction takes place. As futures contracts are standardized in terms of expiry dates and contract sizes, they can be freely traded on exchanges. A buyer may not know the identity of the seller and vice versa. Further, every contract is guaranteed and honored by the stock exchange, or more precisely, the clearing house or the clearing corporation of the stock exchange, which is an agency designated to settle trades of investors on the stock exchanges.

Stock Futures contracts are available on different kinds of assets – stocks, indices, commodities, currency pairs and so on. Here we will look at the two most common futures contracts – stock futures and index futures.

What are stock future tips?

Stock Future Tips are derivative contracts that give you the power to buy or sell a set of stocks at a fixed price by a certain date. Once you buy the contract, you are obligated to uphold the terms of the agreement.

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TBR Update - Stock Cash Future Market

OPENING BELL: - NIFTY FUTURE UP +31.90 @ 8770 BANKNIFTY FUTURE UP +13.70 @ 19699.05 USDINR @ 66.7350

NIFTY FUTURE: - S1-8694.24, S2-8609.37 R1- 8825.99, R2-8872.87 BANK NIFTY FUTURE: - S1 – 19521.26, S2-18357.18 R1- 19778.46, R2-19871.58 

Today’s Market Flow - Stock Future Tips

SPX Flow upgraded to sector perform from underperform at RBC Capital

SPX Flow started at buy with $43 stock price target at Stifel Nicolaus

SPX Flow started at underperform with $32 stock price target at RBC Capital

RBI Policy: Effective interest rates may fall going ahead - Axis Capital expects domestic indices to be flat till end of December. Meanwhile, the market may be volatile on account of domestic and global cues such as US Federal Reserve's action on interest rates, second-quarter earnings, OPEC decison and the action of RBI's Monetary Policy Committee, said Nandan Chakraborty, Managing Director, and Institutional Equity Research at Axis Capital. 

He said other factors such as assembly polls, especially in Uttar Pradesh, too may have an impact. Irrespective of RBI's decision on interest rates on Tuesday, effective interest rates will fall over the next few months, Chakraborty said. There could be a slight de-rating but index will have an upside of 15 percent on an average, he said. 

Chakraborty said consumer durables and building materials stocks will be among the ones investors could look at. He added IT and telecom stocks' outlook has been been bad and valuations have not been exciting and advised investors to avoid such stocks.

Interested in Stock Future Tips, Stock Cash Tips etc. For more information Call @09707112112, 09707221221 or visit @http://www.tradebizzindia.com