Index Futures

Index futures are futures contracts that investors can buy or sell in futures markets. Index futures bet on what direction a specific index is going by a specific date in the future. Unlike options contracts, which have some options, futures contracts are set deals with set dates: legally binding contracts between the buyer and seller.

Index futures are another option for investors who like playing the options game, as well as investors looking to hedge their existing bets against losses.

In order to get in on the index futures market, investors must have enough money to cover the potential losses involved, called the “maintenance margin.” Popular index futures are based on equity indexes, and big ones like the S&P 500, but index futures can track any index.