Index futures are derivatives that allow an investor to lock in the price of a stock index at the time the contract is purchased for trading at a later date. These futures essentially move based on the performance of the stocks that are listed in the underlying index.
With no physical asset involved, most index trading is done through derivatives, and futures contracts are the primary way to trade stock indices. Since an index can include hundreds of companies in its composition, the standardized method of settlement is cash.
How to trade index futures?
There are two ways to trade index futures, one is to buy and sell the contracts directly by accessing the market through a broker. The other is to trade contracts for difference (CFDs), speculating on the price movements of index futures.
To make them work you need to open an investment account, you can do it from the button below
Information provided by NYSE