S&P 500 futures contract is an agreement to buy or sell an underlying asset, where participants agree on the price and settlement dates.
S&P 500 futures stock price: Basic concepts
Futures contracts differ from one another regarding the underlying asset, the time of circulation, the underlying security, and the closing date. There are also S&P 500 mini futures. The S&P 500 futures chart has specifications or parameters, which are set by the exchange and published on its website.
Futures are called futures contracts for a reason. This is because it is impossible to buy and forget about them, like in the case of stocks or currencies. Any contract has a start and an end date, and so do futures. There are several such contracts: during the year trading does not stop, the investor can switch to the next contract, following the executed one.
There may be several contracts for one and the same underlying asset; that is why contracts have a special code.
Clearing is a system of non-cash settlements; at this time there are mutual settlements between the buyer and the seller. It is even simpler: if the investor’s position is in the plus, he receives the profit, if he is in the deficit — he is written off.
S&P 500 futures live: what you need to know.
Futures, unlike stocks, cannot be held indefinitely. First, stocks don’t have an expiration date. Second, when you buy stocks, you begin owning them and may hold or sell them at any time, with a profit or loss being recorded only when the position is closed.
S&P 500 futures stock price: How to earn?
Futures are assets with higher risk. We can say that the same risks are characteristic of stocks. But if they are not leveraged, one can wait out the drawdown and wait for the S&P 500 futures stock price to grow. The worst-case scenario is that the company goes bankrupt or has no prospects and is in a permanent downward trend.
Simply put, futures are not investments. A position in them needs to be checked. They are not assets in the form of stocks. That means you won’t get dividends, and you can’t participate in shareholder meetings.
This is one of the main advantages of the futures market. Let’s imagine a situation where you own shares and they begin to fall in value. The stock has been owned for more than 3 years — you can get a benefit for long-term ownership of the securities. To avoid losing it when the stock falls, you can use futures.
The futures market is very volatile in many assets, making contracts subject to large price fluctuations. If you follow a speculative (short-term) trading tactic, then futures will be more profitable than stocks because they require less investment.
E-mini S&P 500 futures historical prices: opportunities
Various exchange-traded assets serve as the underlying asset for futures. Among them, one can find those which an investor cannot use otherwise than through futures.
With the help of futures, one can construct, and test trading systems, play out important events, hedge investments in the stock market, as well as reduce the influence of dividend gaps.
There are so many parameters to know, how do you figure it all out?
With experience, you’ll find that there are a few of them and it’s not hard to find. On the S&P website, you can open the S&P 500 futures you are interested in, and its page describes all the main important parameters. And don’t forget to keep an eye on e-mini S&P 500 futures historical prices.