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A stock market or share market is an organization or corporation where the brokers and the share holders to have their business running with securities and company stocks. Stock Market Futures are derivatives through which businesses are done. There are two types of Stock Market Futures:
Single Stock Futures
Index Futures
Single Stock Market Futures :Single Stock Market Futures are a kind of securities which share the characteristics of equities and traditional commodity futures contracts. These Single Stock Market Futures are dealt in several financial markets like U.S.A,Canada, U.K. India etc.
In America Single Stock Market Futures were banned from the exchange listings in the 1980s. The cause was the doubt between the Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission over the issue of regulatory authority of these products.
After the launch of Commodity Futures Modernization Act of 2000 became law, the Commodity Futures Trading Commission and the U.S. Securities and Exchange Commission ultimately reached an agreement and SSF started trading yet again.
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Single Stock Futures in the Stock Market Futures has not yet gained the popularity that it had expected. Though the situation is changing for Single Stock Market Futures as the annual volume increased by 200 percent in 2005 than in 2004 it is still very small in comparison with Equity and ETF options.
Index Stock Market Futures:The number of contracts are responsible for the trading of Index Stock Market Futures. The contracts are there to purchase and sell a given evaluation of the index. The value of the index multiplied is defined by the value of the index by a specific pecuniary amount.
It is seen through some researches that with the introduction of the index futures in some instances the unpredictability has been some what reduced in the underlying index. The index futures also allow an investor effective ways of evading and important advances in market timings. The Index Stock Market Future also allows the investors to minimize the risk of loss,maximize the chances of profit.
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