single stock future

Single Stock Future

A derivative in which the buyer and seller agree to exchange one stock at a certain price at a certain time. Single stock futures are bought on margin and, because they are futures and not actual stock, one may short sell single stock futures without being subject to the downtick rule. Single stock futures are usually traded in lots of 100 at a time. South Africa contains the largest market for single stock futures, though they are traded worldwide. In the United States, they are usually traded on OneChicago LLC. See also: Commodity Futures Modernization Act of 2000.

single stock future

A contract in which opposite parties agree to buy and sell a stock at a set price on a certain date. Unlike a stock option in which the owner of the option has a right to either buy (call) or sell (put), both parties in a single stock future contract have an obligation. Trading in single stock futures was pioneered in Europe on the London International Financial Futures and Options Exchange and was banned in the United States until repeal of the Shad-Johnson Accord in 2000. See also Nasdaq Liffe Markets, OneChicago LLC.