Index derivatives

Index derivatives

Index futures are leveraged products that allow you to hedge, trade or gain exposure to an underlying index. On ASX, the most popular index future is the ASX SPI 200™ index futures contract over the S&P/ASX 200.

Index futures are mainly traded by institutions  to achieve one of the following:

  • protect a domestic equity portfolio from short term market falls,
  • arrange cost-effective exposure to an index whilst purchasing the underlying shares,
  • to take a trading view on the direction of the market.

Benefits and risks of trading ASX index futures

Trading ASX index futures offers specific benefits of exchange traded markets, such as:

  • Price transparency and liquidity
  • Lower transaction fees than those incurred when buying or selling the basket of securities making up the index.
  • Immediate execution and confirmation
  • Reduction of counter-party risk
  • Centralised clearing supported by a clearing guarantee.

Trading ASX futures incurs a number of risks, such as:

  • The potential for losses to be magnified through the use of leverage basis risk. This is where the hedge provided by the future does not exactly match the change in the underlying asset.

New ASX Index Future

ASX has launched a new Equity futures contract over the S&P/ASX 200 Gross Total Return index - this index suits the total return benchmark needs of asset managers in Australia as it re-invests dividends. ASX has been able to attract Market Makers to ensure liquidity in the futures contract from launch. Contract specs, tick size, expiries and market hours are included in the below link:

More Information

Types of ASX index futures

ASX Trade24™ platform:

  • ASX SPI 200™ index futures
  • S&P/ASX 200 Gross Total Return index futures
  • ASX Mini SPI 200™ index futures
  • S&P/ASX 200 Resources index futures
  • S&P/ASX 200 Financials-x-A-REIT index futures
  • S&P/ASX 200 A-REIT index futures