Global equity index futures contracts are legally binding sale and purchase agreements. The contract holder must buy or sell a specified value, usually calculated by multiplying the quote of equity index and designated currency, on a specified date. Index futures open a new area for stock market trading and can be a flexible risk management tool. By using index futures, investors can simply capture the trend of a basket of stocks, eliminating the worry about stock selection. It uses leverage and carries high risk with high returns, diversifying investment risk and reducing the impact of stock market fluctuations.
Equity Index Futures are derivatives instruments that allow investors to profit from the price movements of a basket of equities without trading the individual constituents. The high leverage can yield large profits while at the same time also expose investors to high risk. Index Futures are used by investors to hedge risk as they make a profit by predicting market movements.
When a futures trade is placed, the trader must put up a margin amount (typically 3 to 10 percent of the full value of the futures contract) set by the futures exchange. The trader’s profit or loss on the trade adds to or subtracts from this margin deposit. When the value of the account drops below the maintenance level, a margin call is triggered.
FLRF provides trading services on Hang Seng Index Futures, Mini Hang Seng Index Futures, Hang Seng China Enterprises Index Futures, Mini Hang Seng China Enterprises Index Futures, S&P Dow Jones Indices, Dow Jones Indexes, Mini sized Dow Jones Industrial Average Index, NASDAQ Composite, E Mini Nasdaq 100 Stock Index, FTSE 100 Index, France CAC 40, KOSPI 200 Futures, Nikkei Singapore PMI, Nikkei 225 index, Osaka Securities Exchange, Osaka Nikkei 225 Futures, MSCI Singapore Index, MSCI Taiwan Index, NIFTY 50 Index, FTSE China A50 Index and US Dollar Index.