How do Single Stock Futures contracts compare to equity options contracts?
Both products are derivatives based on shares of individual stocks, but the costs, benefits, risks and obligations associated with futures and options are different. Single Stock Futures represent an obligation to deliver or receive the price differential of the contract from the establishment of the position to its offset. Their prices are intended to go up and down in accordance with the price of the underlying shares. Options represent the right, but not the obligation, to deliver or receive company shares during the life of the contract. As with SSFs, their prices fluctuate in line with the price of the underlying shares, but they are also influenced by additional factors, such as the historical or anticipated volatility in the price of the underlying shares. Are SSF products fungible? Initially, SSFs traded on different American exchanges are not expected to be fungible. That is to say, an SSF product purchased or sold on one exchange must be closed out with an offsetting transact
