TRADING STOCK INDEX FUTURES WITH STOCK-TRAK

Once you have mastered the basics of trading commodity futures, you may wish to begin trading stock index futures. Your Stock-Trak account allows you to trade futures on a number of different stock market indexes. To trade stock index futures, you first choose the stock index you want to use and find the ticker symbol for that index. You must also know the ticker extension for the maturity month of the futures contract.
The most popular stock market indexes are the Dow Jones Industrial Average (DJIA) and the Standard and Poor’s 500 (S&P 500). Futures contracts for the DJIA trade under the futures ticker symbol DJ. Futures contracts for the S&P 500 trade under the futures ticker symbol SP. At the time this was written, the contract value for a single DJ futures contract was 10 times the underlying index level, and the contract value for the SP futures contract was 250 times the underlying index level. However, these contract values may change and you should consult the Stock- Trak website for the latest contract specifications. If you wish to know more detail about contract specifications, you should consult the Chicago Board of Trade website (www.cbot.com).
For example, suppose you go short a single DJ futures contract when the futures price is 10,150, and then at contract maturity the underlying index has a value of 10,025. Your dollar gain is then 10 × (10,150 – 10,025) = $1,250. Alternatively, suppose you go long a single SP futures contract when the futures price is 1310, and then at contract maturity the S&P 500 index is at 1302. Your dollar loss is then 250 × (1310 – 1302) = $2,000.
Futures tickers for stock indexes have a two-character extension denoting the contract expiration date. Just like commodity futures, the first character is a letter representing the expiration month, and the second character is an integer representing the expiration year.