Universal Stock Futures

[DummDays]

dear Investors

through my way to study about trading Futures

( leanr about the "mechanics of futures" in this educational link http://www.interactivebrokers.com/en/p.php?f=tradersuniversity&p=futurescourses-default )

I went further for "enlightment"

http://www.cmegroup.com/

and

http://www.euronext.com/editorial/wide/editorial-2321-EN.html

( there is a link to the "Learning Center", but you must first register - its free

I came across a possible interesting Investment Tool:

Universal Stock Futures - in short: USF

here is the Introduction and Explanation

So, Universal Stock Futures offer a cheap, easy and efficient way to trade the price movements of global shares - both up and down. Among other things they offer: low commissions, low margin requirements, an easy way to short sell, no stamp duty, and all the advantages of being an exchange-traded instrument too. However, two instruments in particular - equity spread bets and contracts for differences (CFDs) - are sometimes seen as an alternative to USFs. Here we will briefly consider their merits relative to Universal Stock Future, and, indeed, futures in general.

USFs vs Spread betting

LIFFE's USFs have a number of similarities with the contracts (bets) offered by spread betting companies. They both have a limited contract lifetime. And both are based on "future" prices, as opposed to the current (share/cash index) price.

Exchange traded futures would be expected to be priced with a narrower spread, as the prices are determined competitively on an exchange and don't include any commission, as the spread bets do.

USFs vs CFDs

CFD prices are determined at the discretion of whichever CFD company you're trading with, making them potentially harder to get out of. USFs are traded in an active global market, which should make for ease of trading and smaller spreads.

Establishing a futures position should be cheaper than an equivalent CFD position, as you only need to deposit margin enough to cover the maximum likely overnight loss. Margin is held with LCH.Clearnet and receives a small amount of interest.

In contrast, for CFD positions, you need to deposit typically 20-30% of the contract exposure, and for bought positions pay interest on the total exposure value, calculated daily.

Futures have a limited lifespan: they cease trading at a pre-defined date. CFDs can be held indefinitely, but they incur financing costs throughout the period they're held.

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well, I know - my studies are on a certain level, that only an advenced finacial Investor would come up with something like this

but if you are already trading Futures, I am sure, you will like to discuss with me the use of USF

[hoppla]

Not sure what the question is here, but I'd (personally) trade the futures rather than any linear derivative sold by a market maker. I dont see the point unless your cost of trading the futures/ underlier is high. Why? If your futures cost per roundturn is competitively low there is no point in paying a market maker in those instruments who will very likely charge you market rate + their spread (plus commissions). Good deal for them and a bad one for you. If the other end of the deal is a bucket shop then even a much worse deal for you as "market rate" will be up to their interpretation.

Admittedly, have never looked into spreads betting, so am by no means an expert. Another reason you might wanna do this is that the risk associated with a tick move in the CFD might be lower than the one with the futures, so more suitable for a retail investor. This "service" comes at a cost though.

[badge]

USF have never really taken off, for good reason.