About ASX Index Futures
Futures are contracts to buy or sell a particular asset (or cash equivalent) on a specified future date. On ASX, futures contracts are traded over three sharemarket indices - the S&P/ASX200 Index, S&P/ASX 200 A-REIT Index, and the S&P/ASX50 Index.
ASX Index Futures provide you with exposure to an index's movement for a limited period of time. You can use futures as part of a strategy integrated with your share investments, or in isolation.
There are a number of different reasons to trade futures, including:
- Gain exposure to the broad sharemarket or to a market sector
- Hedge a physical position
- Trade declining markets
- Achieve leveraged returns
Benefits of trading ASX Index Futures
Trading ASX Index Futures offers specific benefits of exchange traded markets, such as:
- Price transparency and liquidity
- Lower brokerage fees than typically found when trading in the underlying securities
- Immediate execution and confirmation
- Reduction of counter-party risk
- Centralised clearing supported by a clearing guarantee.
Key product features
When you buy an ASX Index Future, you agree to 'buy' the index’s value underlying the futures contract on a specified date in the future. When you sell a future, you agree to 'sell' the index’s value at that time. At maturity of the contract a cash settlement takes place. Whether you make a profit or loss at maturity depends on how the index has moved in the period since the futures contract was traded.
The full value of the futures contract is not paid or received when the contract is established. Instead both buyer and seller pay an initial margin, which is a small percentage of the value of the contract. Over the life of the futures contract you will either pay or receive variation margins as the price of the futures contract varies. View information on futures margins for more information on the way futures positions are margined. The traded price is the basis on which profit or loss is calculated at maturity or on closing out the position if this takes place before maturity.
Types of ASX Index Futures
There are different types of ASX Index Futures available on ASX:
ASX Index Futures contracts are traded on either the ASX Trade or ASX Trade24 trading platforms. As a result, the trading information for each contract differs. The table below provides further information on:
The trading platform on which each product trades
Finding a broker to get accss to the market
|ASX Index Futures contract||Trading Platform||Find a Broker||Charts||Delayed Prices|
|ASX SPI 200™ Index Futures||ASX Trade24||Participants list (PDF 38KB)||SPI 200 chart||ASX SPI 200™ Index Futures prices|
|S&P/ASX 200 A-REIT Index Futures||ASX Trade||Find a broker||XPJ index chart||S&P/ASX 200 A-REIT Index Futures prices|
|S&P/ASX 200 Index Futures||ASX Trade||Find a broker||XJO index chart||S&P/ASX 200 Index Futures prices|
|S&P/ASX 50 Index Futures||ASX Trade||Find a broker||XFL index chart||S&P/ASX 50 Index Futures prices|
In Australia, futures are traded through three types of brokers
- full service brokers
- discount brokers
- a combination of trade execution service and limited other services.
To trade futures, your broker must be a Trading Participant of ASX Futures. Your choice of broker will depend on your previous trading experience, your level of confidence and time.
Risks of trading ASX Index Futures
Like any investment, futures have risks that you need to understand before investing. Specific risks include market risk.
You should obtain independent advice from a professional adviser prior to making any final decision.
Further information on the risks of trading ASX Index Futures is available.