Security Futures
An Introduction to Their Uses and Risks
Security futures include futures contracts on common stocks and futures contracts on a narrow-based index of securities.
This brochure provides an introduction to what security futures are, how they work, and how they can be used as well
as their risks and limitations.
Traditionally, one had to open an account with a stock broker to trade securities (equities), and another account
with a futures broker to trade commodities. Now, an investor can participate in both of these markets
with just one account: a futures trading account.
And security futures will require less margin than their stock-market counterparts and will operate without
some of the rules characteristic of traditional stock trading. For example, it is not necessary to own or borrow
shares of the underlying stock in order to sell a security futures contract.
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