Single-stock futures

In the United States, they were disallowed from any exchange listing in the 1980s because the Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission were unable to decide which would have the regulatory authority over these products. After the Commodity Futures Modernization Act of 2000 became law, the two agencies eventually agreed on a jurisdiction-sharing plan and SSF's began trading on November 8, 2002. Two new exchanges initially offered security futures products, including single-stock futures, although one of these exchanges has since closed. The remaining market is known as OneChicago, a joint venture of three previously-existing Chicago-based exchanges, the Chicago Board Options Exchange, Chicago Mercantile Exchange and the Chicago Board of Trade. In 2006, the brokerage firm Interactive Brokers made an equity investment in OneChicago and is now a part-owner of the exchange. As of September 2020 OneChicago has been closed. ==Pricing==

Single stock futures values are priced by the market in accordance with the standard theoretical pricing model for forward and futures contracts, which is: :F = [S - PV(Div)] \cdot (1 + r)^{(T-t)} \ where F is the current (time t) cost of establishing a futures contract, S is the current price (spot price) of the underlying stock, r is the annualized risk-free interest rate, t is the present time, T is the time when the contract expires and PV(Div) is the Present value of any dividends generated by the underlying stock between t and T. When the risk-free rate is expressed as a continuous return, the contract price is: :F = [S - PV(Div)] \cdot e^{r \cdot (T-t)} \ where r is the risk free rate expressed as a continuous return, and e is the base of the natural log. Note the value of r will be slightly different in the two equations. The relationship between continuous returns and annualized returns is rc = ln(1 + r). The value of a futures contract is zero at the moment it is established, but changes thereafter until time T, at which point its value equals ST - Ft, i.e., the current cost of the stock minus the originally established cost of the futures contract. == See also ==