Single Stock Futures (SSF) are futures contracts on individual stocks, narrow based indexes or Exchange Traded Funds (ETFs). They are also referred to as Security Futures Products in some early literature. In late 2000, the U.S. Congress passed legislation lifting the ban on these products, which were already trading in Europe and elsewhere.

Trading in SSFs on OneChicago began in November 2002. OneChicago lists futures on 1464 well-known stocks such as IBM, Apple, Google and others. SSFs also trade on several foreign exchanges and are an important tool for professional traders. Security futures enable money managers, proprietary trading operations and hedge funds to efficiently execute a variety of trading strategies for U.S. listed equities including securities lending.

When a SSF is traded, both the buyer and seller put up a good faith deposit called margin. Margin requirements are generally 20% of the cash value of contract, although this requirement may be lower if the investor also holds certain offsetting positions in cash equities, stock options or other SSF in the same securities account. A OneChicago SSF is an agreement for delivery of 100 shares of the underlying security or ETF at a designated date in the future, called the expiration date.

Narrow based index futures (NBIs) are SSF on narrow based equity indexes (generally 9 or less stocks) and are cash settled. OneChicago lists a variety of “boutique” NBIs based on demand from large institutional customers called OneChicago Select Indexes. Select Indexes do not have an LMM assigned to them to make two-sided markets. At certain periods there may not be a bid and/or ask.

SSF on ETFs have similar characteristics to SSF, although the underlying security is shares in the ETF rather than common stock in a specific company. Thus at expiration, the deliverable assets are shares in the underlying ETF. OneChicago trades ETFs such as the SRDR Trust (SPY), PowerShares QQQ, and the DIAMONDS ETF.