CME Group Launches Single-Stock Futures Covering Over 50 Major US Companies
CME Group has launched single-stock futures covering more than 50 of the largest US companies, including the Magnificent Seven, Micron, Pfizer, and Walmart. The contracts are cash-settled based on the closing price of the underlying stock and offer leveraged exposure. Trading is available 23 hours a day, five days a week. There are two types of quarterly contracts: larger contracts based on 100 shares and 22 micro futures based on 10 shares. Single-stock futures were banned in the US for nearly 20 years until 2002 but failed to attract sufficient interest and ceased trading in 2020.
CME Group has launched single-stock futures covering more than 50 of the largest US companies, including the Magnificent Seven as well as Micron, Pfizer, and Walmart. The contracts are cash-settled based on the closing price of the underlying stock and provide leveraged exposure. Trading is available 23 hours a day, five days a week, longer than the stock market. There are two types of quarterly contracts: larger contracts based on 100 shares and 22 micro futures contracts based on 10 shares. Single-stock futures were banned in the US for nearly 20 years until they were reauthorized in 2002, but they failed to attract sufficient attention and trading ceased in 2020. The product has applications outside the US: in India, it is used to establish leveraged directional positions, hedge stock portfolio risk, or arbitrage; in Europe, financial institutions use it to improve balance sheet efficiency, especially during quarter-end and year-end regulatory reporting periods.