Financial Index Futures

Portfolio solutions for institutions and private investors.

A financial index future is a cash-settled contract based on a stock index. It carries with it an obligation to make or receive a cash payment equal to the difference between the value of the contract when it was entered into and the value at settlement.

While unsystematic risk can be eliminated from portfolios through diversification, no amount of diversification can do away with systematic risk. For this reason, many asset managers use financial index futures to modify the systematic risk involved with being invested in markets.

Financial index futures are effective tools for managing and modifying equity market risk for asset managers and individual investors alike since they allow investors to buy or sell the entire market index in a single transaction with minimal transaction costs.

The Burak Hannon Brojde Group can measure your portfolio’s specific sensitivity to overall market movements and devise financial index futures strategies that can help protect your portfolio from market downturns.  Alternatively, we can use these instruments to increase the sensitivity of your portfolio with minimal transaction costs should you have a favorable near-term view of the overall equity market.