What Is an "Index Future" and What Is Its Underlying Asset? ▴ Learn

What Is an “Index Future” and What Is Its Underlying Asset?

An index future is a futures contract where the underlying asset is a financial index, such as the S&P 500 or, in crypto, a composite index like the CME CF Bitcoin Reference Rate. Trading an index future allows a single transaction to represent a broad basket of assets, offering diversified exposure.

They are always cash-settled.

What Is the Difference between Cash-Settled and Physically-Settled Futures?

How Does the Custody Risk Change for a Physically-Settled Bitcoin Futures Contract versus a Cash-Settled One?

How Does the Margin Requirement Differ for Physically-Settled versus Cash-Settled Futures?

Explain the Difference between Physically-Settled and Cash-Settled Futures Contracts