FAQs about ASX Index Futures
- Where can I find futures prices?
- How do I find open interest in a futures series?
- Where can I find out the composition of the S&P™/ASX 200™ and S&P™/ASX 50™ indices?
- If I already trade options do I have to set up a new account for futures?
- If I already trade options do I have to sign new client agreement forms?
- Who can I trade futures through?
- Why is the cash settlement value of my futures contract different from the index level at the close on the last trading day?
- Are there offsets with margins?
- Are there market makers for futures, and what are their responsibilities?
- What is the difference between a futures contract and an option?
- What is the difference between a future and an index LEPO™?
- Why can't all brokers trade futures?
- Can my no advice broker trade futures?
- Can I lodge stock as collateral to cover my margins?
- Can I lodge stock I have bought on margin as cover for a futures position?
- What is the most I can lose when I trade futures?
- Can I block SPI Futures against XJO Options?
- How are ASX futures contracts different to SFE™ futures contracts?
- Will my futures contract appear on a CHESS™ holding statement?
- Why aren't there options over futures?
- Why has ASX listed futures contracts over the A-REIT sector?
- How are Mini Property Futures different from Mini 50 and Mini 200 futures?
You can access delayed futures prices on this website.
Links to the delayed prices for the ASX Index Futures are available.
You can find open interest in a futures series on this website.
To find out how the S&P/ASX indices are constructed, please refer to the overviews of Capitalisation indices.
Yes, your broker will open a separate account for your futures trading.
You will have to sign a new client agreement form even if you already trade options through your broker. This is because the risks of futures trading are different to those of options trading.
To trade futures, your broker must be a Trading Participant of ASX Futures.
Why is the cash settlement value of my futures contract different from the index level at the close on the last trading day?
The futures settlement price is based on the opening price of each stock in the underlying index on the morning of the maturity date. As the stocks in the index open, the first traded price of each stock is recorded. Once all stocks in the index have opened, an index calculation is made using these opening prices. This settlement value is likely to be different from the index level at the close on the previous day, which is the last trading day.
This method, used by several major exchanges internationally, is regarded as an effective way to manage volatility often associated with the maturity of index futures contracts. Because the Australian market staggers the opening of stocks, it is not possible for the entire market to be traded in one 'hit' during the opening period.
Traders who are concerned about a significant move in the market overnight may choose to close out their futures position before the close of trade on the last trading day.
Offsets are available for margins across different futures contracts. For example, margin offsets would apply if you held a long position in the ASX Mini 200 futures contract and a short position in the ASX Mini 50 futures contract.
From 14 October 2002 you are able to offset the credit premium of bought option positions against futures initial margin liabilities.
If you want to qualify for margin offsets, your futures and options accounts at the Australian Clearing House must be held in the same name. Your broker must also clear their options and futures trades through the same legal entity.
Market makers play an important role in the futures market. Under ASX Operating Rules they are required to provide quotes in the Mini Index Futures contracts listed on ASX. Quotes must be for a specified minimum number of contracts, and within a maximum spread between the bid and ask prices.
This requirement is to ensure liquidity in the market, so that traders are more easily able to trade into and out of an option position.
The main differences between a futures contract and an option include:
- A futures contract is a legally binding agreement to buy or sell an asset on a specified future date. In other words, both parties have a contractual obligation. Both buyers and sellers have significant exposure should the market move against them.
- The buyer of an option contract, on the other hand, has the right, but no obligation, either to buy or to sell the underlying asset. This means that the option buyer's maximum possible loss is limited to the premium paid.
- Both the buyer and the seller of the futures contract are margined, whereas margins are paid only by the seller of an option.
- There is no exercise price for a futures contract – you simply buy or sell a contract with the maturity date of your choice at the market price at the time.
- You do not pay a premium when you trade a futures contract – instead you pay a small deposit or initial margin.
LEPO stands for Low Exercise Price Option. LEPOs give the option taker the right to 'buy' the underlying index at a strike price price of 1 point. Economically, LEPOs exhibit similar price behaviour to futures contracts over the same index. There are some differences between the two instruments:
- the taker of a LEPO must remember to exercise the LEPO at expiry if the position has not been closed out, whereas the futures contract is automatically cash settled at maturity
- the risk margin of a LEPO is calculated as a percentage of the value of the underlying index, whereas the initial margin of a futures contract is a fixed dollar amount
- LEPOs are traded on the ASX's options market. Index futures are traded on the ASX's futures market
In order to deal in futures, a futures brokers licence is required. This licence also covers a broker who both deals in and advises on futures. If a broker advises on, but does not deal in futures, a futures advisers licence is sufficient.
Your no advice broker can only trade futures if they have a futures brokers licence.
Initial margins can be covered with either eligible collateral or cash. Variation margins can only be covered with cash.
No, stock bought on margin is only eligible as collateral to cover call options written over that particular stock.
When you trade a futures contract, you enter a legally binding agreement to buy or sell the underlying index at maturity – no matter how far the index rises or falls between the time of your transaction and the maturity date. It is therefore possible to suffer substantial, and theoretically unlimited, losses if the market moves significantly against you.
It is possible to effect an Exchange For Physical (EFP) between:
- any number of ASX SPI 200® Futures and
- a Special Size trade in the ASX XJO options contract.
ASX allows these EFPs to be reported to give brokers and their customers dealing certainty in these larger sized contingent trades.
Please refer to SPI V XJO EFPs.
The main difference between futures contracts traded on ASX and SFE is the contract size. ASX Mini Index Futures contracts have a contract multiplier of $10 per point, whereas the ASX SPI 200 Index Futures have a contract multiplier of $25 per point. If both futures contracts were trading at 3500 points, for example, the ASX Mini Index Futures contract value would be $35,000, while the ASX SPI 200 Index Futures contract value would be $87,500.
No, futures contracts are not registered on CHESS. Documentation showing the registration of your futures contracts will be provided direct by your broker. This documentation is similar to that currently provided for your options trades.
Options over the S&P/ASX 200 are traded on ASX's options market. The exposure these options give you is economically the same as the exposure options over the ASX Mini 200 futures contracts would give you. Please refer to Index Options for more information.
The futures contract provides diversified exposure to this sector of the market, making it attractive to investors wanting to trade a view on the A-REIT sector without having to pick an individual trust.
The main difference is the underlying index. Mini Property Futures are over the S&P/ASX 200 A-REIT Index. The maturity dates, contract multiplier and method of settlement are the same. For more details, please refer to contract specifications.