Single Stock Futures Begin Oct. 25th

Discussion in 'Financial Futures' started by Baron, Sep 24, 2002.

  1. Baron

    Baron ET Founder

    OneChicago, LLC today announced that it intends to launch security futures trading on Friday, Oct. 25, 2002, subject to certain regulatory approvals. The Exchange also published its transaction fee schedule.

    OneChicago Chairman and Chief Executive Officer William J. Rainer said, “OneChicago is ready to offer futures on individual stocks and narrow-based indices. We look forward to the opening of this marketplace and the development of this new element of the nation’s capital markets system.”

    OneChicago, a joint venture of the Chicago Board Options Exchange® (CBOE®), Chicago Mercantile Exchange Inc. (CME) and the Chicago Board of Trade (CBOT®), will offer futures contracts on 85 single stocks and 15 narrow-based indices, beginning with 20 of these products on the first day of trading. The Exchange will list the remaining contracts over the ensuing two weeks. All of OneChicago’s products will be electronically traded through both CBOEdirect® and GLOBEX® platforms and can be carried in either securities accounts or futures accounts.

    The new contracts will allow fund managers, individual investors, professional traders and others to manage their exposure to stocks. Security futures can be used independently or in conjunction with stocks, stock options or stock index futures to execute a variety of trading strategies for U.S. listed equities.

    Before trading can begin, however, the Securities and Exchange Commission (SEC) must approve OneChicago’s customer margin rules. The SEC and the Commodity Futures Trading Commission must also approve the language of the risk disclosure statement that all firms will be required to send to their customers to permit trading in security futures.

    Transaction Fees

    OneChicago today also announced its schedule of transaction fees. The fee includes all exchange and clearing fees as well as the mandatory Securities Exchange Act Section 31(d) fee on single stock futures. OneChicago said it intends to waive all of these transaction fees for the first 30 days of trading at the Exchange.

    OneChicago’s standard rate to trade single stock futures is 30 cents per contract per side, and the standard rate for narrow-based indices is 45 cents per contract per side. OneChicago also offers discounted rates for eligible members of the Exchange of 15 cents for single stock futures and 20 cents for narrow-based indices.

    “The marketplace has asked us for a simple and competitive fee structure. I believe OneChicago has delivered on that request,” Rainer said.

    For additional information about OneChicago, further details of the fee structure and OneChicago products, access the OneChicago Web site at
  2. sub7slak


    Thanks for the announcement Baron, looking forward to it!
  3. Sharp


    I'm a little confused. What are the "SSF" referred to on this site:

    And what is the NQLX? They claim that these SSF have been trading since early 2001. Have "ADR" "SSF" already started trading? Does anyone here know?
  4. at first I was like "why do I need these if I have options", but too many times this year I have been right about the stock but lost or broke even on the option. With SSF's my return should be much more in line with the stock, no need to worry about changing delta's, etc. , just stock analysis. The only thing I'm worried about is a fat spread and high retail commissions, but i'm sure that will sort out over time.
  5. thank you Baron.

    i'm trying to understand what these SSFs will be like. 2 questions:

    will they be leveraged contracts like eminis or will they be traded like shares of stocks?

    also, will the PDT rule apply to these? if the PDT rule does not apply, why would anyone with a small account trade the stock when they could trade the futures?

    someone please clarify this for me.

  7. def

    def Sponsor

    Commission: IB already committed to $1 a contract.

    Spread: Depends on many factors. On day one I suspect only a handful of market makers will provide decent spreads. As firms test out their systems and get comfortable with their software, liquidity should improve greatly. One great thing about the product is that they are easily arbed. Thus assuming the backend infrastructure of the exchange has sufficient throughput, the markets will get tight via competition. (if there is a lack of throughput - i.e. number of order book changes per second are limited, firms will have to compensate by either making wider quotes or less live markets). Even if there are no markets on the screen, if you place an order and it gets out of line by a few pennies, somone will most likely hit your price.
  8. def

    def Sponsor

    leveraged but not to the same extent as futures (fear of competition) :mad:

    PDT: You're on to something.

    edit: should also add, if they take off, there will naturally be pressure from the NYSE and NASDAQ to remove the uptick rule (back to competition)
  9. Swish


    I'm still missing something......

    Why do we need SSFs if we have options? Won't the SSFs behave marketwise similiarly to options?
    #10     Sep 26, 2002