The SPI Futures Index, also known as the ASX SPI 200 Futures Index, is an index that tracks the performance of the top 200 companies listed on the Australian Securities Exchange (ASX). It is a derivative product that allows investors to trade on the future direction of the Australian stock market.
The SPI Futures Index is a futures contract, which means it is a legally binding agreement to buy or sell the underlying asset at a predetermined price and date in the future. In this case, the underlying asset is the ASX 200 Index, which is made up of the top 200 companies listed on the ASX by market capitalization.
The SPI Futures Index is used by investors and traders as a tool for managing risk and speculating on future market movements. It is also used by market participants to hedge their positions in the Australian stock market. Here is a breakdown of the key features of the SPI Futures Index:
- Contract Size
The SPI Futures Index contract size is based on the ASX 200 Index and is valued at AUD 25 per index point. For example, if the ASX 200 Index is trading at 6,000 points, the value of the SPI Futures Index contract would be AUD 150,000 (6,000 x AUD 25).
- Margin Requirements
The margin requirements for trading the SPI Futures Index vary depending on the broker and the type of account. Generally, traders are required to maintain a certain amount of margin in their account to cover potential losses. Margin requirements can range from 2% to 10% of the contract value.
- Trading Hours
The SPI Futures Index trades on the Sydney Futures Exchange (SFE) and is open for trading from 7:00 am to 10:00 pm (Sydney time) on weekdays. This allows investors to trade the index outside of normal ASX trading hours.
- Settlement
The SPI Futures Index settles on the last trading day of the contract month. Settlement can be done through cash settlement or physical delivery of the underlying asset.
- Price Movements
The price movements of the SPI Futures Index are based on the movements of the ASX 200 Index. If the ASX 200 Index goes up by 1%, the SPI Futures Index will also go up by 1%.
In summary, the SPI Futures Index is an important tool for investors and traders who want to speculate on the future direction of the Australian stock market. It allows them to trade the ASX 200 Index outside of normal ASX trading hours and manage their risk through margin requirements. As with all derivatives products, investors should be aware of the risks involved and seek professional advice before trading.