Down Payment Set on Single-Stock Futures

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Bloomberg News

Federal regulators Tuesday proposed minimum down payment requirements for a new way to bet on stocks.

The Securities and Exchange Commission proposed that investors must put a minimum of 20% down to trade futures based on individual stocks.

Single-stock futures are set to be available to individual investors starting in late December.


Congress voted last year to end a two-decades-old moratorium on trading of single-stock futures.

A futures contract is an agreement to buy or sell an investment or commodity at a set price by set date.

Unlike options contracts, which give investors the right to buy or sell at a set price by a set date, futures are obligations that must be met.

The 20%-down requirement would be calculated off the market value of the security.

Investors may be able to put down a smaller amount if they hold related investments that would offset, or hedge, the futures contracts, the SEC said.

Single-stock futures will be jointly overseen by the SEC and the Commodity Futures Trading Commission. They may trade on stock exchanges and in futures markets.