Questions tagged [futures]

For questions relating to futures contracts.

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62 views

Backwardation or Contango?

I was looking for graphs of backwardation and contango but I've found seemingly contradictory image results: For instance this image and this one show contago on top, but this one shows it on the ...
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1answer
289 views

Why not sell ETNs (Exchange Traded Notes) untethered from roll yield?

I rewrote these two questions with numbers and edits. Pls explain like I'm 5. I don't understand any of the comments that just raise more questions! What the heck's "a predictable and ...
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1answer
122 views

Where would my futures contracts go if the counterparty gets liquidated?

What would happen to my futures contracts such as S&P500 futures if the counterparty of my contracts gets liquidated due to a heavy use of leverage? Since futures contracts are made between two ...
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2answers
65 views

Is there something like a covered call for futures?

I am making my first baby steps in learning about future contracts. In the option market there is something like a covered call, where one can limit the upside risk to the loss of the shares one ...
2
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1answer
48 views

How futures are sold, when they are first released?

When termed futures are released in the market, such as XBTU21 (Bitcoin futures for the 3rd quarter), how are they sold in the market? Stocks, for example, are sold through IPO when they are first ...
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0answers
86 views

Am I understanding the math of this futures contract trade correctly?

DISCLAIMER: To be clear, I have zero interest in trading futures. I don't have the knowledge, risk appetite, or capital for that. I'm just asking this to learn. The S&P 500 closed at 3,939.43 on ...
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1answer
43 views

TNote 10yr Futures YTM vs market yield?

I understand how to calculate the yield on a 10 yr TNote based on face, price & coupon. I don’t understand why the yield (and price) on a futures contract about to expire is so different than the ...
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3answers
123 views

Size of market for physically delivered futures

I understand the difference between cash settled and physically setted futures contracts. I also know that most physically settled contracts end up not being exercised and are closed before expiration....
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1answer
124 views

Should an amateur keep hands off Futures Contracts / Futures Trading?

I am a total beginner in the stock market. I have bought only 1 stock so far, but later sold it with almost 30% profit. Now as a next step, I wanted to increase my profit thanks to the leverage effect ...
2
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1answer
56 views

Isn't this graph of contango wrong?

I found this image describing contango with the accompanying quote. I expected the graph be in the opposite direction that is price being lower today than in 1 year. Is this graph wrong? is the ...
4
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1answer
140 views

Why isn't contango in crypto futures markets simply arbitraged away?

Currently (21-Feb-2021), bitcoin futures markets are in contango, with contracts maturing at the end of June trading at about a 9.1% premium to the spot price. My assumption is that one could purchase ...
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0answers
51 views

Non-US citizen/resident trying to begin trading options and futures

I'm from Brazil and I already trade shares, options and futures here for ~5 years in the Brazilian stock market. I began trading shares in the US stock market a few months ago using the Passfolio ...
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2answers
909 views

Is investing in index futures better than investing in index funds? [duplicate]

Given that futures price is equal to S*e^(rt), it is possible to create a synthetic investment into an index by: entering into an index future for the amount of money which are planned to be invested ...
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3answers
190 views

What is the gambling difference between sports betting and trading stock market derivatives based on indices?

What is the practical difference in terms of gambling between wagering on the future score of a sporting match and wagering on stock market derivatives based on indices, such as the future value of ...
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0answers
31 views

Can I use stocks as margin for commodities futures?

Last week, I bought 4 shares of emicro gold futures (https://www.cmegroup.com/trading/metals/precious/e-micro-gold_contract_specifications.html) worth about 70k. I got a margin call for owning those ...
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3answers
207 views

Do futures markets have any predictive potential?

Comparing the WTI Crude Oil spot prices of the last five years with WTI Futures prices for Nov'2020 over time, it seems that they mostly follow the current price. This seems to enable one to lock in ...
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43 views

Why derivatives markets are the most fragile in times of correction?

I read an article about bitcoin derivatives which has been skyrocketing lately. The author wrote at the end of the article: "Derivatives markets are the most fragile in times of correction, ...
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0answers
41 views

How do we trade and earn profits in future contracts? [closed]

Suppose there is a future contract with a market price of $100 and its lot size is 50, so can I purchase the lot at $100? And while selling before expiry or in intraday, suppose the price is $150, so ...
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2answers
71 views

How does clearing house deal with such cases?

Imagine that I entered short into futures contract for asset "A" at the price 100 USD. Lets say that on the other side John went long. Contract expires in one year. I don't use leverage and ...
0
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1answer
28 views

How do futures affect my maintenance margin requirements in my margin?

Hypothetical Background: I have an Reg T margin account with Interactive brokers. I have a maintenance margin requirement of ~30% for that; I have calculated the drawdown necessary to get a margin ...
2
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1answer
68 views

Futures and dividends

Let's say I have a portfolio of futures for a long period (let's say 2000-2020). All of my underlyings are equity indices. I am always invested in the next maturity futures (thus I never wait for the ...
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1answer
57 views

What is futures price?

Suppose that today is January first. I see from financial news that spot price of object A is 100$ and first of March futures price of object A is 150$. What does it mean exactly that futures price is ...
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1answer
48 views

confused about futures date versus tomorrow's value of underlying stock

A beginner question, I am puzzled about futures on the S&P500. I believe the futures contract arranges a price to purchase the underlying at fixed dates in the future (such as expiring in March); ...
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1answer
57 views

Who are the writers of index futures?

For futures, such as oil futures, I understand that the oil companies would be the writers of the oil futures to lock-in selling price. In this context, these oil companies have the underlying assets, ...
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0answers
42 views

Return on a futures contract

If Sam invests $200000 on Futures and takes Futures short position on an index fund whose settlement is one year from now, with the current futures price being $1200. The relation between spot price(S)...
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1answer
55 views

Where can we see Futures Volume?

Does anyone know where I can see Futures volumes? None of the boards show it.
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1answer
49 views

Do futures regulations stipulate a minimum account balance?

I opened a futures trading account at a futures brokerage that requires a $100 minimum deposit. Are these minimum deposits specified by any regulator, or is it up to each broker to set a minimum ...
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1answer
89 views

How do I protect myself against a futures broker's collapse?

I noticed that SIPC does not cover futures. Accounts at futures brokers are not protected by SIPC. If I am worried about the possibility of a futures broker's collapse, what should I do? Do I need to ...
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1answer
61 views

If a European investor goes long or short the US ultrabond future, are they taking any forex risk or is it all interest rate risk?

(The Ultrabond future is a bet on the price of 30-year US treasury bonds, which are dollar denominated.)
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1answer
71 views

How to find world market index symbols in different brokers (i.e. TOS, RH)

I use Thinkorswim to check on the E-Mini S&P 500 futures, 'ES20', but I also want to see the FTSE 100, CAC 40, AEX, Hang Seng, etc. But when I enter those names to the search field I get no ...
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3answers
140 views

Buy and hold VIX futures for guaranteed profit?

This question was inspired by this Motley Fool article: VIX Investing: Why Not Just "Buy Low Fear, Sell High Fear"? Buying low fear and selling high fear seems to be a guaranteed profit ...
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2answers
101 views

How to get fiat liquidity on BTC assets

I am bullish on BTC and at the same time I need some fiat liquidity right now. Is there some combination of financial products I can use? As an example: I have 10 BTC (assume current FX $10,000) I ...
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1answer
56 views

Futures prices reported on websites and media

You would often see a list of futures prices on stock websites. For example, on Seeking Alpha: What are the expiry dates of the futures they are referring to, particularly for the Dow, S&P and ...
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1answer
112 views

how to use SP500 future to predict the stock market

I have another naive question. On Thursday night and before Friday morning, after Trump posted on twitter saying he contracted Covid-19 around 12:50AM. The news media was saying the US stock market ...
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7answers
5k views

Can I hedge my household expenses using the financial markets?

Apparently farmers can hedge against high raw material prices and low crop prices by using financial instruments such as forwards and futures. Can I use financial instruments to similarly hedge my ...
14
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3answers
3k views

Why are options more popular than futures among retail investors?

I am puzzled as to why options seem to be more popular than futures among retail investors. Brokerage firms seem to emphasize their options offerings more than their futures offerings. On Robinhood, ...
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2answers
111 views

Maximum Profit (Options Vs Futures)

Consider this scenario: Say the S&P 500 closed at 3400 today (Sep-9) and you knew (100%) for a fact that by the end of trading day tomorrow (Sep-10) 4pm it will close at 3200. So now, given this ...
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1answer
26 views

Can any index be converted to a respective trading instrument using F&O contracts?

Pardon me if this sounds silly, I am not a finance student but it seems to me that any index can be used as a trading instrument with proper regulations. For example much like forex, with currency ...
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1answer
69 views

Can any European-style options be exercised before expiration?

I found a page that says the following about European-style options (in the context of weekly and end-of-month options for S&P 500 futures): European-style options can be exercised only on the ...
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2answers
312 views

Do most future traders really believe that stock prices will be lower in the next two years?

I am looking at the following website that shows the stock futures chain https://www.cmegroup.com/trading/equity-index/us-index/sandp-500.html The way I read this, the further out you go, the lower ...
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0answers
39 views

How to set take profit when there is no position yet

I'm trading on binance futures and sometimes I see a nice (for example) resistance level. I then set a limit sell order so that if price reached that level I sell x coins. However I would also like to ...
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2answers
448 views

What time do gold futures weekly options expire?

What time on Friday do gold futures weekly options expire? For example, I am interested in knowing what time the /GCV20:XCEC 1/100 AUG 20 (Wk2) /OG2Q20:XCEC 1925 CALL option expires this Friday. I ...
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1answer
160 views

How can I verify that a futures broker is legitimate?

To verify that a stock brokerage firm is legitimate and not a scam, I can use FINRA's BrokerCheck. Some stock brokers helpfully provide a link to BrokerCheck in the fine print at the bottom of web ...
2
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1answer
189 views

What are the situations that could cause unlimited liability in my stock brokerage account?

I have a stock brokerage account, and I want to make sure that the things I do in it will not cause me to be liable for more than the amount I put into the brokerage account. My question is: under ...
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1answer
163 views

How will Options on Micro E-mini S&P 500 futures be taxed in the US?

CME is going to publish a new contract: Options on Micro E-mini S&P 500 Future in Aug 31, 2020. I was wondering how will it be taxed? There's already discussion like Are futures options eligible ...
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1answer
72 views

Who are allowed to take short positions in WTI CRUDE Oil futures?

Can any individual like me take short position?
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2answers
159 views

Who creates oil futures?

Who creates futures such as CL.AUG20 (August WTI Crude Oil contract) sold on NYMEX which can be bought via eToro? I understand that when a company wants to go public, they sell these stocks on an ...
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1answer
40 views

What is the meaning of asset underlying the futures contract?

I am reading a book of J.C Hull on Future and option where he explained the basis risk which is S2 + F1 - F2 or F1 + b2 I got this concept but reading further he expand above expression as F1 + (S*2 - ...
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1answer
36 views

How is money calculated when buying BRR future on CME through IB?

I tried on simulated account to buy 1 BRR future (multiplier = 5). Total amount with commissions expected was 49280 Initial margin expected was +31047 Maintenance margin expected was +24837 ...
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3answers
143 views

Does Futures markets influence price?

I have a few questions: For example I am going LONG on ES1! with leverage. I don't acquire an actual S&P 500 fund but as how futures work I just have a contract that I believe its price is going ...

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