Overview
- What are Single Stock futures?
- What makes Single Stock futures different from broad-based Index futures (such as E-mini S&P 500 futures)?
- How do Single Stock futures fit into the CME Group ecosystem?
- How would a trader price a Single Stock futures contract?
- What futures contracts will be available at launch?
- Will CME Group consider additional stocks after the launch of the initial Single Stock futures suite?
- What DCM will Single Stock futures be listed on?
Product details
- Where can the details of the individual contract specs be found?
- What is the notional value of a Single Stock futures contract?
- What is the minimum price fluctuation?
- What will be the listing convention of Single Stock futures?
- Will Single Stock futures be block eligible?
- Will BTIC, EFPs and derived blocks be available?
- What are the trading hours?
- What are the final settlement procedures?
Operational details
- Where can I find more operational documentation on Single Stock futures?
- How are corporate actions handled?
- What are the fees for Single Stock futures?
- How are Single Stock futures margined?
- From a trading and clearing perspective, can clients trade Single Stock futures in either securities or futures accounts?
- What tax implications are there for Single Stock futures, such as 60/40 U.S. tax treatment or 871m for international investors?
- What collateral is accepted by CME Group in regards to Single Stock futures?
- How do circuit breakers work?
- What are the Bloomberg codes for Single Stock futures?
- Where can I find market disclosures?
Now trading: Single Stock futures
Access 50+ of your favorite U.S. stocks, all with the power of futures.
Overview
1. What are Single Stock futures?
Single Stock futures are a type of futures contract where the underlying is the stock of an individual company, such as Tesla or Microsoft. This new suite of contracts is now available for trading.
2. What makes Single Stock futures different from broad-based Index futures (such as E-mini S&P 500 futures)?
Single Stock futures are security futures products that are jointly regulated between the SEC and CFTC, unlike broad-based Index futures which are regulated solely by CFTC.
3. How do Single Stock futures fit into the CME Group ecosystem?
CME Group has listed a number of broad-based Equity Index futures and options on Globex, beginning with E-mini S&P 500 futures in 1997. Single Stock futures complement the existing futures and allow traders to express their view on an individual stock, rather than a broad-based futures contract such as E-mini S&P 500 or Nasdaq-100 futures. The Single Stock futures listed are the key constituents of these indices and the ecosystem.
4. How would a trader price a Single Stock futures contract?
Similar to broad-based Index futures, the theoretical price of a Single Stock futures contract is determined by calculating the fair value. A trader must account for all of the costs and benefits of holding the underlying stock until the futures expiration date. This includes the ordinary dividends, which need to be priced into the basis along with the all-in financing rates and time to maturity.
5. What Single Stock futures contracts are available?
55 Single Stock futures contracts (sized at 100 shares) and 22 Micro-sized contracts (sized at 10 shares) are available for trading. Stock names are available in this fact card.
The new suite totals over $200B in average daily notional volume. By index weighting, they comprise in the range of 55% – 65% of the S&P 500 and Nasdaq-100.
6. Will CME Group consider additional stocks after the launch of the initial Single Stock futures suite?
Yes, CME Group would consider growing the Single Stock futures ecosystem based on feedback and subject to CME listing standards.
7. What DCM is Single Stock futures listed on?
CME
Product details
8. Where can the details of the individual contract specs be found?
Please visit cmegroup.com/ssf to find more details and the contract specs.
9. What is the notional value of a Single Stock futures contract?
The notional value of a CME-listed Single Stock futures contract will be dependent on the price of the futures contract.
Larger-sized Single Stock futures will have a contract multiplier of 100 shares x futures price.
Micro Single Stock futures will have a contract multiplier of 10 shares x futures price.
For example, if a NVIDIA futures contract is traded at $200, the notional value would be $20,000.
10. What is the minimum price fluctuation?
|
Single Stock futures |
Micro Single Stock futures |
|
|---|---|---|
|
Minimum price fluctuation |
0.01 index points = $1.00 BTIC: 0.01 index points = $1.00 |
0.01 index points = $0.10 |
11. What is the listing convention of Single Stock futures?
Quarterly contracts for two consecutive quarterly months (Mar, Jun, Sep, Dec) are listed for trading. Based on client demand and regulatory reviews, CME Group would consider introducing additional expirations.
12. Are Single Stock futures block-eligible?
Yes, the minimum block threshold is 50 contracts for the larger-sized Single Stock futures. Micro Single Stock futures are not block-eligible.
13. Are Basis Trade at Index Close (BTIC), Exchange for Related Positions (EFPs and EFRs) and derived blocks available?
Yes, all of these transaction types are available for the larger-sized Single Stock futures contracts. They are currently unavailable for Micro Single Stock futures.
14. What are the trading hours?
These contracts will follow the same trading hours as Equity Index futures at CME Group. Markets will be 5:00 p.m. CT – 4:00 p.m. CT Sunday – Friday with a one-hour maintenance window from 4:00 CT – 5:00 p.m. CT each day.
15. What are the final settlement procedures?
Single Stock futures are financially settled in U.S. dollars, with the final settlement price being determined using the official closing price of the underlying stock at the respective primary listing exchange on the expiration date.
Thus, trading terminates at 3:00 p.m. CT on the third Friday of the contract month.
Operational details
16. Where can I find more operational documentation on Single Stock futures?
Access more technical documentation for Single Stock futures including corporate actions, halts and testing.
17. How are corporate actions handled?
In addition to the technical operational document linked in the preceding question, view a high-level guide for investors to understand how corporate actions will be addressed.
18. What are the fees for Single Stock futures?
View the SER with Single Stock futures fee details. View the fee schedule for the latest information.
19. How are Single Stock futures margined?
Single Stock futures are margined under the SPAN framework.
CME Clearing follows its established policies and procedures in determining margin levels for Single Stock futures, but, as required by CFTC and SEC regulations, initial and maintenance margin requirements for long or short outright Single Stock futures positions must be, at a minimum, 15% of the current market (notional) value of the futures contract.
Additionally, margin requirements for offsetting positions in different contract months of the same Single Stock futures contract (i.e., calendar spread) must be, at minimum, 5% of the current market value of the contract leg with the higher market value.
No additional margin offsets are currently provided.
20. From a trading and clearing perspective, can clients trade Single Stock futures in either securities or futures accounts?
Single Stock futures can be held in either futures or securities accounts at the futures commission merchant (FCM)/broker-dealer (BD) level, if the clearing member is a fully registered FCM and BD. If the firm is an FCM and notice-registered BD, they must be held in a futures account and, if the firm is a BD and notice-registered FCM, they must be held in a securities account. FCMs will determine whether they would support either or both account types. If an FCM seeks to hold client positions in a securities account, additional SEC/FINRA rules may apply, including margin rules (applicable to BDs) under FINRA Rule 4210. An FCM that is neither a notice-registered nor a fully registered BD is not eligible to offer Single Stock futures to clients.
|
Firm registration type |
Permitted account type(s) |
|---|---|
|
Fully registered FCM & BD |
Can hold positions in either futures or securities accounts (as determined by the FCM). |
|
FCM & notice-registered BD |
Must be held in a futures account. |
|
BD & notice-registered FCM |
Must be held in a securities account. |
|
FCM only (Neither notice-registered FCM nor fully registered BD) |
Not eligible to offer Single Stock futures. |
21. What tax implications are there for Single Stock futures, such as 60/40 U.S. tax treatment or 871m for international investors?
CME Group does not provide legal or tax advice and advises clients to check with their own legal and tax counsel or via their provider. See CME Rulebook Chapter 9 Rule 990.
22. What collateral is accepted by CME Group in regard to Single Stock futures?
For further details, please see Acceptable Collateral.
23. How do circuit breakers work?
During the hours of 9:30 a.m. ET to 4:00 p.m. ET on regular trading days, or 9:30 a.m. ET to 1:00 p.m ET on shortened trading days, both Market Wide Circuit Breakers (MWCBs) and Individual Securities Circuit Breakers will apply.
When level 1, 2 or 3 MWCBs are declared due to the S&P 500 Index having fallen 7%, 13% or 20% for the day, all Single Stock futures will be halted for trading. Additionally, if a regulatory halt has been imposed on the underlying stock of a Single Stock futures contract by its primary listing exchange, the corresponding Single Stock futures contract will also be halted for trading. Trading of futures will resume when trading of the halted stock(s) in its (their) primary market resumes.
For hours outside of those listed above, there will be no price limit for Single Stock futures. However, Dynamic Circuit Breakers (DCBs) will apply. Please consult the FAQ for more information on how DCBs functions.
Additionally, when E-mini S&P 500 (ES) futures are lock-limited at their overnight price limits, trading in Single Stock futures at CME Group will be halted.
24. What are the Bloomberg codes for Single Stock futures?
Access a comprehensive list of Bloomberg tickers and vendor codes.
25. Where can I find market disclosures?
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
