Single Stock Futures

Single stock futures(SSFs) are financial instruments similar to commodity futures, but use common stock as the underlying instead. They are traded on futures exchanges and can offer more leverage than buying stock on a margin account.  It is easier to short stocks with single stock futures as there is no uptick rule, however the risk is magnified along with the leverage it offers.  In addition, single stock futures do not offer the ownership rights given by buying common stocks, therefore traders of single stock futures will not receive dividends.

This instrument appears to be primarily suitable for traders and speculators and not long term investors though there are possiblities to hedge with single stock futures.