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stock index future

 - 2 dictionary results
Main Entry:  stock index future
Part of Speech:  n
Definition:  a security that uses composite stock indexes to allow investors to speculate on the performance of the entire market or to hedge against losses in long or short positions with the settlement of the contracts in cash
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Financial Dictionary

stock index future

A contract for the future delivery of a sum of money based on the value of a stock index (in most cases, 500 times the index). Unlike other futures contracts, in which a given commodity is specified for delivery, stock index futures call for cash settlements, because it is not possible to deliver an actual index. This future can be used to speculate on the future direction of the stock market (rather than just a few stocks) or to hedge a portfolio of securities against general market movements. See also Section 1256 contracts.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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