What Are S&P 500 Futures?


Quick Answer

S&P 500 futures are contracts to buy or sell stocks in the S&P 500 index for a specific price. They are paid and delivered at some specified date in the future.

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Full Answer

The two kinds of futures contracts are financial and commodities contracts. Financial contracts include cash or other financial instruments. S&P 500 futures contracts are an example of financial futures contracts. Commodities contracts include physical products, such as corn, wheat, gold and oil. Futures are used as a hedge against price movements pending delivery of the asset. Although futures contracts call for the delivery of an asset at a specified time, most futures contracts are closed out prior to the delivery date.

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