Synthesis: The Marriage of Stocks and Futures The union of stocks and futures into the single stock futures contract brings to the financial markets a new vehicle as well as a new era in trading and investing. By combining the lower margin of futures with the wide range of available stocks and narrow-based indices, a new area of financial possibilities is open to investors and traders. | I CHAPTER FIVE Synthesis The Marriage of Stocks and Futures The union of stocks and futures into the single stock futures contract brings to the financial markets a new vehicle as well as a new era in trading and investing. By combining the lower margin of futures with the wide range of available stocks and narrow-based indices a new area of financial possibilities is open to investors and traders. But to fully appreciate and use the SSF market to its maximum potential a thorough understanding of its functioning is necessary. This chapter provides the needed facts. I Examining the Single Stock Futures Contract The current SSF contract had its roots in the Universal Stock Futures that were first traded at the LIFFE exchange in London. SSF trading was slow to come to the United States but adopted quickly in many other countries following their success in London. 43 44 How to Trade the New Single Stock Futures Which Stocks Are Traded as SSFs As of March 14 2002 OneChicago the joint venture that created SSF trading in the United States listed the following 70 SSFs. SSFs are based on individual stocks whereas an NBI is one index based on a group of stocks within the same industry. American Express Co. AXP American International Group Inc. AIG Amgen Inc. AMGN AmR Corp. Del AMR AOL Time Warner Inc. AOL Applied Materials AMAT AT T Corp. T Bank Of America Corp. BAC Bank One Corp. ONE Best Buy Co. Inc. BBY Biogen Inc. BGEN Bristol-Myers Squibb Co. BMY Broadcom A BRCM Brocade Communications Sys. BRCD Cephalon Inc. CEPH Check Point Software Tech. CHKP ChevronTexaco Corp. CVX Cisco Systems Inc. CSCO Citigroup Inc. C Coca-Cola Co. KO Dell Computer Corp. DELL eBay Inc. EBAY EMC Corp. EMC Emulex Corp. EMLX Exxon Mobil Corp. XOM Ford Motor Co. F General Electric Co. GE General Motors Corp. GM Genzyme l Division GENZ Goldman Sachs Group Inc. GS Halliburton Co. HAL Home Depot Inc. HD Idec Pharmaceuticals Corp. IDPH Intel Corp. INTC International Business .
