ETF Futures And Options

AAA

DEFINITION of 'ETF Futures And Options'

A variety of derivative products based on exchange-traded funds. ETF futures are contracts that represent an agreement to buy (or sell) the underlying ETF shares at an agreed-upon price on or before a specified date in the future. ETF options, on the other hand, are contracts that give the holder the right, but not the obligation, to buy (or sell) the underlying ETF shares at an agreed-upon price on or before a specified date in the future. These products are typically used when you adopt a bullish or bearish outlook on the economy or an industry as a whole, over individual stocks.

INVESTOPEDIA EXPLAINS 'ETF Futures And Options'

On March 1, 2011, the CME Group issued a report indicating a delisting of futures on ETFs, specifically, the Nasdaq-100 Tracking Stock, Standard & Poor's Depositary Receipts and iShares Russell 2000 will be delisted following their March 2011 expirations. On March 26, 2012, CBOE Crude Oil ETF Volatility Index security futures (OV) began trading and options on the OVX Index began trading the next month, on April 10, 2012.

RELATED TERMS
  1. Option

    A financial derivative that represents a contract sold by one ...
  2. Index ETF

    Exchange-traded funds that follow a specific benchmark index ...
  3. Spiders - SPDR

    A short form of Standard & Poor's depositary receipt, an ...
  4. Standard & Poor's 500 Index - S&P ...

    An index of 500 stocks chosen for market size, liquidity and ...
  5. Futures

    A financial contract obligating the buyer to purchase an asset ...
  6. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
Related Articles
  1. Options & Futures

    Leveraged Investment Showdown

    Margin loans, futures and ETF options can all mean better returns, but which one should you pick?
  2. Mutual Funds & ETFs

    ETF Options Vs. Index Options

    Choosing either ETF options or index options can make the difference between big profits or a big bust.
  3. Mutual Funds & ETFs

    Modernize Your Portfolio With ETF Futures

    Gain access to premier, highly liquid ETFs with lower capital requirements.
  4. Mutual Funds & ETFs

    A Guide To ETF Liquidation

    There are a lot of ETF options, but not all have staying power. Learn what happens when an ETF fails.
  5. Options & Futures

    The Dangerous Lure Of Cheap Out-Of-The-Money Options

    Betting on an expected move is fine, but one must understand the risks involved in a position - and consider the alternatives.
  6. Options & Futures

    Options -- Accessing Stakes In Apple At Less Cost

    Finding Apple stock costly to trade? Here are multiple ways to trade it through low-cost Apple options.
  7. Mutual Funds & ETFs

    These Oil ETFs Offer Cheap, Easy Access

    Interested in investing in oil and the companies that extract and refine it? Here's a list of ETFs. Just be wary of fees.
  8. Mutual Funds & ETFs

    Why Monthly Dividend ETFs are Good for Everyone

    Monthly dividend ETFs can help ease the financial stress on investors of all ages. Here are a few fund names for you to consider.
  9. Chart Advisor

    Use This ETF To Trade The Swiss Franc

    Traders were stunned last week when the Swiss National Bank removed the currency peg that tied the value of the Swiss franc to the euro.
  10. Investing Basics

    The Strange New World Of The Bitcoin Exchange Futures Market

    We explain the basics of the Bitcoin exchange and futures market.

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center