Frequently Asked Questions

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Security Futures*

What is the deliverable for a security future?
The deliverable for a security future is the underlying stock at the settlement price. Because brokersXpress clears security futures contracts as futures, brokersXpress does not currently allow a customer to take delivery or make delivery of the underlying stock.
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What orders are accepted for security futures?
brokersXpress accepts market, limit, stop and stop limit orders.
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What is the margin requirement for security futures?
The margin requirement for a security future is 25% of the value of the underlying asset.† For example, if GOOG/U5 is trading at 288.39, the margin requirement for one contract would be calculated as follows:
GOOG/U5 = 288.39  
Margin Requirement = 25% of value of the underlying shares
  = 25% (current quote * number of underlying shares per contract)
  = 25% (288.39 * 100)
  = $7,209.75
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Why are the prices of security futures priced higher/lower than the underlying stock price?
Security futures prices generally follow the theoretical formula:
Futures price = stock price x [1+(interest rate/360) x days to expiration)] - dividend (if any to expiry)
The security futures contract typically trades at a premium to the underlying stock because of an adjustment for interest rates. This premium is the result of the interest earned on the capital saved by not posting the full value of the underlying stock.
There are instances when a security future trades at a discount to the underlying stock. Since security futures holders are not entitled to collect dividends, the price of the security future must be adjusted downward by the present value of dividend payments that are scheduled prior to expiration. When a large dividend payment is forthcoming or when the underlying stock is difficult to borrow, the security futures price may trade at a discount to the actual cash price of the underlying stock.
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If I am long a security future and the underlying stock pays a dividend, am I entitled to the dividend?
No. Holders of security futures are not entitled to dividends paid on the underlying stock.
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What securities are available for Single Stock Futures (SSF)?
View the list of security futures offered.
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If the underlying stock splits, how is the security future affected?
When undergoing a stock split, security futures are affected similar to the underlying stock. For example, a 2-for-1 split of an underlying stock affects the security future as follows:
For an even split (2-for-1) Ex-Date -1 Ex-Date
Symbol Change No change ABC ABC
Position Quantity Multiplied by the split ratio Long 1 ABC Long 2 ABC
Contract Multiplier No change 100 100
Deliverable No change 100 ABC 100 ABC
Prior settlement price Divided by the split ratio $90.00 $45.00
Original trade price Divided by the split ratio $90.00 $45.00
For an uneven split (3-for-2) Ex-Date -1 Ex-Date
Symbol Change New symbol ABC DEF
Position Quantity No Change Long 1 ABC Long 1 DEF
Contract Multiplier Multiplied by the split ratio 100 150
Deliverable Multiplied by the split ratio 100 150
Prior settlement price Divided by the split ratio $90.00 $60.00
Original trade price Divided by the split ratio $90.00 $60.00
Other corporate actions such as dividends, stock rights offerings and mergers affect the price of security futures. For specific information on the terms of the merger, consult the options news network on the OCC website.
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Do I need to wait for a downtick to sell short a security future?
No, selling a security future short does not require a downtick in price. Provided you have the initial margin, you can sell a security future short without restriction††.
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Do I need a short locate when selling short?
No, you do not have to locate shares in order to sell a security future short. Provided you have the initial margin, you can sell a security future short without restriction††.
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What are the requirements for trading security futures?
Futures products involve substantial risk and are only available to customers based on certain minimum requirements. Applicants are reviewed on a case-by-case basis, and we may require more than the minimum prior to approval during the initial launch of this product. Minimum requirements include:
  • At least one year of prior trading experience
  • Minimum liquid net worth of $25,000
  • Minimum annual income of $25,000
  • Investment objective of speculation
  • A brokersXpress securities brokerage account with a signed margin agreement on file.
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Can security futures be traded in IRAs?
Futures accounts are limited to accounts coded for margin.
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Futures involve substantial risk and are not appropriate for all investors. Please read Risk Disclosure Statement for Futures and Options prior to applying for an account.

Futures on Single Stocks, ETFs and Sector Indexes use a greater degree of leverage and involve high degree of risk. Please read Risk Disclosure Statement for Security Futures Contracts available by calling (888) 280-7030.

* Single stock futures offered through brokersXpress are considered futures contracts, and as such, are governed by the CFTC and are neither considered a security nor covered by SIPC.

† More aggressive margin of 20% is offered for accounts that qualify.

†† Selling a security future short contains significant risk as your potential loss is unlimited.

brokersXpress, LLC. Member NFA.