The stock index futures like the S&P 500 are trading currently BELOW the cash price for many reasons like dividend expectations, hedge pressure and more.
So, if you are long stock index cash stocks it might be the better alternative to buy the future than to be long the stocks:
1. The current annualized return future to cash is about 1.5% (S&P)
2. Low counterpart risk (CME would be counterpart)
3. Margins for S&P’s are about 10% (CME.com, performance bond). Treasuries could be bought, with the rest, as well as with most the money in the account
4. 23+ hours liquid trading.
5. Ability to trade options on that future.
No intention to attract anyone to buy, only tell that momentary futures are probably the better alternative, what could change with time. Please feedback on this topic.
- swisstrader
