7

Single Stock Futures and Stock Index Futures

LEARNING OBJECTIVES

After completing this chapter, you will be able to answer the following questions:

  • What are single stock futures?

  • What are the uses of single stock futures?

  • How are single stock futures priced?

  • What are stock indexes and stock index futures?

  • How are stock index futures priced?

  • What are the uses of stock index futures?

  • How can index futures be used for managing equity portfolio risk?

BOX 7.1 China Launches Index Futures Trading Account

China announced that it is planning to launch index futures, margin trading and short selling of stocks in its two stock exchanges in Shanghai and Shenzhen starting from April 2010. These measures are undertaken to provide depth to the ...

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