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Security Futures: An Introduction to Their Uses and Risks

Wed, May 16 2007, 09:02 GMT
by National Futures Association NFA

National Futures Association

Financial markets today offer an everwidening array of financial products. Among the most recent are security futures, which include futures contracts on common stocks and futures contracts on a narrow-based index of securities.

Security futures, which have been authorized by Congress, can be bought and sold for either price risk management or for speculative purposes. For many reasons, security futures may or may not be an appropriate trading vehicle for any given individual. Or they may be appropriate in some circumstances but not others.

National Futures Association, a Congressionally authorized self-regulatory organization, has prepared this booklet to provide an introduction to what security futures are, how they work, and how they can be used, as well as their risks and limitations.

This booklet is not intended to serve as a formal risk disclosure statement. That document must be provided by the broker offering the product. This booklet is merely intended to be one component of the due diligence individuals are encouraged to undertake prior to making any investment decision regarding security futures.

For additional information, refer to NFA’s brochure, “Understanding the Opportunities and Risks in Futures Trading” and the security futures risk disclosure statement. Both documents can be found on NFA’s web site (www.nfa.futures.org).

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Published on  Wed, May 16 2007, 09:02 GMT

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