Anthony G.

asked • 12/19/19

Whats the purpose of S&P 500 futures?

If the S&P 500 is at a level of 2500 then the market value of a futures contract is 2,500 x $250 or $625000. So whats the point of buying a contract if as of December 12/18/2019 the total share value of the S&P 500 is $52434.7. It seems that the buyer of the contract would lose money if the other party would be obligated to deliver all of the shares once the contract expires? Am I understating this right?

1 Expert Answer

By:

Lenny D. answered • 12/22/19

Financial Professional with many years of Wall Street Experience

Still looking for help? Get the right answer, fast.

Ask a question for free

Get a free answer to a quick problem.
Most questions answered within 4 hours.

OR

Find an Online Tutor Now

Choose an expert and meet online. No packages or subscriptions, pay only for the time you need.