DEFINITION of 'Futures Equivalent'
The number of futures contracts needed to be associated with a speculative option position. The futures equivalent can be calculated by taking the number of options and multiplying it by the previous day's risk factor (delta) for the same option series.
BREAKING DOWN 'Futures Equivalent'
This term is generally used to refer to the equivalent position in futures contracts that is needed to have a risk profile identical to the option. This Delta is used in deltabased margining and risk analysis systems. Delta based margining is an option margining system used by certain exchanges. This system is equivalent to changes in option premiums or to changes in future contract prices. Future contract prices are then used to determine risk factors on which to base margin requirements. A margin requirement is the amount of collateral or funds deposited by customers with their brokers.

Option Margin
The cash or securities an investor must deposit in his account ... 
Delta Spread
An options trading strategy where the trader initially establishes ... 
Delta Neutral
A portfolio consisting of positions with offsetting positive ... 
Futures Exchange
Traditionally, a term referring to a central marketplace where ... 
Atlantic Spread
An options trading strategy that involves purchasing both an ... 
Futures
A financial contract obligating the buyer to purchase an asset ...

Trading
Options Trading Strategies: Understanding Position Delta
Learn more about the position delta hedge ratio and how it can tell you the number of contracts needed to hedge a position in the underlying asset. 
Trading
Options On Futures: A World Of Potential Profit
There's one simple hurdle in the transition from stock to futures options: learning about product specifications. 
Investing
Options on Futures
Options on futures contracts offer another way for day traders to use options. These are traded on the same exchange as the underlying futures contract. Traders should take care to understand ... 
ETFs & Mutual Funds
Leveraged Investment Showdown
Margin loans, futures and ETF options can all mean better returns, but which one should you pick? 
Trading
Using "The Greeks" To Understand Options
These riskexposure measurements help traders detect how sensitive a specific trade is to price, volatility and time decay. 
Trading
The Forex Greeks And Strategies
We look at the different kinds of Greeks and how they can improve your forex trading. 
Trading
Trading Options on Futures Contracts
Futures contracts are available for all sorts of financial products, from equity indexes to precious metals. Trading options based on futures means buying call or put options based on the direction ... 
Trading
Options Greeks: Delta Risk and Reward
by John Summa (Contact Author  Biography)Perhaps the most familiar Greek is Delta,which measures option sensitivity to a change in the price of the underlying. Delta is most likely the first ... 
Trading
The Ins And Outs Of Selling Options
Selling options can seem intimidating but with these tips, you can enter the market with confidence. 
Managing Wealth
Offset Risk With Options, Futures And Hedge Funds
Though all portfolios contain some risk, there are ways to lower it. Find out how.

What are common delta hedging strategies?
Learn about common delta hedging strategies, including how to make a position in options delta neutral by offsetting risk ... Read Answer >> 
Why does delta only range from 1 to 1?
Learn what the option Greek delta is, what affects the value of delta for an option and why the delta of an option can only ... Read Answer >> 
How can you use delta to determine how to hedge options?
Learn what delta is, how to use delta to hedge options and how to maintain a deltaneutral position by deltahedging options ... Read Answer >> 
How do the investment risks differ between options and futures?
Learn what differences exist between futures and options contracts and how each can be used to hedge against investment risk ... Read Answer >> 
How can I calculate the delta adjusted notional value?
Find out how to calculate the delta adjusted notional value of an options contract, and why gross notional value cannot be ... Read Answer >> 
What industries typically use delta hedging techniques?
Learn what industries use delta hedging techniques for options trading, and understand how delta neutral trading strategies ... Read Answer >>