SSFs are an alternative way to invest and trade equity products. At expiration the SSF turns into a long or short stock position. Accordingly if you are interested in buying any of the Stocks whose symbol is displayed above you will notice that you can purchase a SSF that is currently trading BELOW the offer on the stock. That is, you can buy the SSF cheaper now and at expiration you will get the stock at a discount to the present underlying purchase price. All prices below were last updated at 15:50:01 EST on 2009-01-06, and will have fresh updates throughout the trading day. HOVER over the symbol to see the range of the implied annualized discount for 2009-01-06. (more…)

The structure of the single stock futures (SSF) market makes it as ideally suited for borrowing and lending money at the AAA credit rating of the Options Clearing Corporation as European-exercise index options on the S&P 500 (SPX). The reason is simple: Just as trades in European-exercise options cannot be exercised until the expiration date, neither can trades in SSFs.

In addition, as long as short positions in SSFs deliver into long and short positions, respectively, in the underlying stock or exchange-traded fund, there is no basis risk. The future will be priced at the stock plus the interest rate cost of carry minus the future value of the expected dividend. As expiration approaches, the future’s price converges to the stock’s price and then delivers into the stock itself.

View PDF

The following is an abridged version of a column that appeared on RealMoney.com on July 22, 2008.

The entire sturm und drang about naked short selling last week might have been interesting had it not been so unnecessary. Single stock futures (SSFs) can and have been used to do the exact same trade since November 2002. Advocates on both sides of the debate are arguing about the best way to escape a room whose door is and has been open.
Using Single Stock Futures
Let’s distinguish between short-selling and naked short-selling. The former involves locating a stock, borrowing the shares and selling them; the latter skips the location of the stock and borrowing same. As option market makers in particular have emphasized in recent days, their ability to engage in naked short-selling until such time as shares can be located and borrowed is vital to their ability to function in today’s electronic markets. Both market makers and normal short-sellers have a vital role to play in markets. (more…)

The tutorial covers such topics as:
The SSF Financing Benefit.
SSFs are considered a cost efficient method to invest in stocks. This is because SSFs have the cost of carry interest rate built into their price. This interest rate is locked when the trade is made and is determined in the SSF pricing by multiple participants in a competitive open market. By contrast, when purchasing stock on margin the variable interest rate is dictated by that single broker in a non-competitive environment which is subject to market interest rate volatility.
Click the Image to View the Tutorial!

In an effort to provide education about our products and their benefits, OneChicago provides ongoing webinars and other education events.

Below is a list of upcoming events.

OneChicago Blocks & EFP Trading System
The OneChicago B.E.T.S. (Blocks and EFP Trading System) is intended to streamline the current reporting of Bi-lateral (i.e. pre-negotiated trades between you and your customer or other market participant) Block and EFP trades and additionally create an “on screen” (point and click) trading platform for Block & Block-Roll orders as well as a matching system for EFPs. The system will auto-match orders in strict price-time priority. Block-Rolls and EFPs will be displayed and traded on a differential basis. There are two types of user interfaces available. An internet based Graphical User Interface (GUI) and an Application Programming Interface (API). Users may connect via the internet, VPN, or point-to-point connection.

Single-stock futures are securities that share some of the features of Equities and also some of traditional commodity . There are interest rate benefits that can not be found with other products.
where F is the single-stock futures contract price, P is the underlying stock price, r is the annualized interest rate, and Div is the expected dividend.

Another valuation of single stock futures can be found through the following:

where S is the price of the underlying (the stock price), PV(Div) is the Present value of any dividends entitled to the holder of the underlying between T and t, r is the risk free rate, and e is the base of the natural log. F is of course the price of the single stock futures contract.