Single Stock Futures Meaning & Definition

Definition of Single Stock Futures

Futures contracts on individual securities or single stock futures have been created for many of the most widely traded large cap stocks. Like other futures contracts single stock futures obligate both parties to either make or take delivery of the underlying stock. The traditional contract size for single stock futures contracts is for 100 shares of the underlying security. Some single stock futures contracts may cover larger amounts for up to 1,000 shares of the underlying security.

Applying "Single Stock Futures" to Securities Exams:

The CME Group and The Chicago Board Option Exchange (CBOE) created OneChicago to trade single stock futures contracts. The listing requirements for single stock futures contracts are regulated by both the SEC and The CFTC. The listing requirements require surveillance to guard against insider trading in the underlying security and the trading volume in the underlying security must be significant enough to ensure against the price of the security being easily manipulated, The listing standards for the single stock futures contract must be as stringent as the requirements in place for listing stock options on the security, Pass your exam with world class series 3 training material