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


Lenny D. answered • 12/22/19

Financial Professional with many years of Wall Street Experience

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