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.

Delta
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How Does Delta Hedging Work?
Delta hedging is a derivative trading strategy that attempts to reduce  or eliminate  the risk caused by price changes in the underlying asset.

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 >>