how to buy stock futures — step-by-step

How to Buy Stock Futures

Brief summary

Stock futures are standardized futures contracts whose underlying is a single equity or a stock index. This article explains core concepts, where stock futures trade, a practical step‑by‑step process for how to buy stock futures, associated fees and margins, common strategies and risks, and regulatory/tax considerations for prospective buyers. Read on to learn the mechanics, how to choose a contract and broker (including Bitget for crypto‑related futures), and how to manage risk as a beginner.

Note: This article is educational and not financial advice. Futures trading carries substantial risk and can produce losses exceeding initial capital.

Overview of Stock Futures

A futures contract is an agreement to buy or sell an asset at a predetermined price on a specified future date. Stock futures are futures where the underlying asset is either a single equity (single‑stock future) or a stock index (index future). Buying a futures contract gives you exposure to the underlying price movement without immediate ownership of the underlying security.

How stock/index futures differ from spot stock trading

• Spot stock trading involves buying actual shares and owning equity rights (voting, dividends where applicable).
• Futures provide leveraged exposure and settle by cash or by delivery depending on contract terms; they require margin rather than full upfront payment.
• Futures trade on futures exchanges with standardized contract specifications and clearinghouse settlement processes.

Typical uses

• Speculation: traders seek leveraged price exposure to capture directional moves.
• Hedging: portfolio managers use index or single‑stock futures to hedge exposure to broader or single equity risk.
• Cash management and arbitrage: traders use futures to implement cash-and-carry, basis trades, or synthetic positions.

Common markets where they trade

• Regulated futures exchanges (e.g., major exchanges that list stock and index futures) and brokerage venues that provide retail access.
• Crypto platforms also offer futures on crypto assets—those are distinct products (see the crypto contrast section) and sometimes provided alongside traditional futures on some broker platforms such as Bitget for crypto derivatives.

Key Concepts and Terminology

Contract specification

A futures contract is standardized. Key elements include:

• Underlying: the stock or index the contract references.
• Contract size: number of underlying units per contract (for single‑stock futures it could be 100 shares per contract, though some exchanges use different sizes).
• Tick size/value: the minimum price movement and the monetary value of that movement.
• Delivery/settlement type: cash settlement (index futures often) or physical settlement (some single‑stock futures deliver the underlying shares if held to expiry).
• Expiry month: specific month(s) when the contract matures.

Always read the exchange's contract specification sheet before trading any contract.

Margin and leverage

• Initial margin: the minimum capital you must post to open a futures position.
• Maintenance margin: the minimum equity you must maintain; if your account falls below this, you may receive a margin call.
• Mark‑to‑market: futures positions are valued daily; gains/losses are posted to your account each trading day.
• Margin calls: if mark‑to‑market losses reduce account equity below maintenance margin, you must add funds or close positions.
• Leverage: because you post a fraction of the notional (initial margin), leverage amplifies both gains and losses.

Settlement types

• Cash‑settled index futures: settle in cash based on an index settlement price; no physical delivery of component stocks.
• Physically settled single‑stock futures (SSFs): may require delivery of the underlying shares at expiration unless positions are closed or rolled.
• Rolling contracts: traders who wish to maintain exposure beyond expiry typically close the near contract and open the next expiry (roll). Rolling introduces basis and transaction cost.
• Holding to expiration: requires understanding settlement mechanics, final settlement price, and any physical delivery obligations.

Notional value, ticks, and lot sizes

• Notional value = contract size × futures price. It represents gross exposure.
• Ticks measure price increments. Multiply ticks moved by tick value to compute P/L.
• Lot sizes determine minimum position increments.
• Micro and mini contracts exist to match smaller account sizes and reduce minimum notional exposure.

Types of Stock-Related Futures

Index futures (e.g., S&P 500, Nasdaq E‑mini)

Index futures reference a stock index. Characteristics and uses:

• Cash settlement at expiration based on an index formula or settlement value.
• Commonly used for macro exposure, portfolio hedging, and tactical allocation changes.
• High liquidity in major index futures makes them suitable for large hedges and institutional use.

Single‑stock futures (SSFs)

• Contracts on individual equities where available.
• SSFs differ from owning the underlying stock: no direct shareholder rights unless position is converted to delivery; margins and settlement differ.
• SSFs can be used to express a leveraged long or short view on a specific stock or to form synthetic positions.

E‑mini and Micro futures

• E‑mini and Micro futures are reduced-size versions of standard contracts.
• They lower capital requirements and make futures accessible to smaller retail accounts.
• Useful for position scaling, testing strategies, and limiting notional exposure.

Crypto futures — contrast

• Crypto futures (including perpetuals and expiring contracts) differ from traditional stock futures in settlement mechanisms, trading hours, and often counterparty models.
• Perpetual futures are common in crypto: they have no fixed expiry and use funding rates instead of settlement.
• Traditional index and single‑stock futures are exchange‑listed with clearinghouse settlement and regulated oversight; crypto futures often trade on both regulated derivatives exchanges and crypto platforms.
• Bitget provides crypto futures and perpetual contracts; when discussing crypto derivatives, note they are distinct from traditional stock futures in regulatory treatment and market structure.

Where Stock Futures Trade (Exchanges and Brokers)

Principal futures exchanges and clearing role

• Major regulated futures exchanges list index and equity futures and operate central clearinghouses to manage counterparty risk. Clearinghouses guarantee performance and handle margining and settlement.

Retail access via brokers

• Retail traders access futures through futures‑enabled brokers that provide order entry, risk controls, and clearing links to exchanges.
• When evaluating brokers, check product availability (index futures, single‑stock futures, mini/micro contracts), platform features (DOM/ladder, charting, order types), margin rules, fees, and regulatory registration.

Crypto platforms and Bitget

• Some crypto venues offer futures on crypto assets; for crypto futures exposure or wrappers tied to crypto, Bitget is a prominent platform to consider. Bitget also provides Web3 wallet integrations — recommend Bitget Wallet for custody when using crypto services offered by Bitget.

Step‑by‑Step: How to Buy Stock Futures

Below is a practical, stepwise approach for how to buy stock futures safely and methodically.

1) Education and research

• Learn contract specifications: tick size/value, contract size, expiry months, settlement rules.
• Understand market hours and liquidity patterns for the chosen contract.
• Research historical volatility and volume to set realistic stops and position sizes.
• Form an entry/exit plan with risk limits and contingency for margin calls.

2) Open and apply for a futures-enabled account

• Choose a futures‑capable broker and complete the application. Futures access often requires a separate approval process that assesses experience and financial suitability.
• Account types: cash accounts, margin accounts, and some retirement accounts (IRAs) allow certain futures trading under specific rules—confirm with the broker.
• Read broker and exchange disclosures; futures trading approvals may set leverage limits and product permissions.

3) Fund the account and meet margin requirements

• Fund the account with at least the initial margin required for your intended position size plus a buffer for intraday volatility.
• Distinguish intraday margins (often lower) from overnight margins (typically higher). Brokers publish margin schedules per contract.
• Maintain excess equity to avoid forced liquidations if markets gap.

4) Choose the contract and expiration

• Select the underlying (index or single stock), and choose contract month: front month offers highest liquidity but shortest time horizon; further‑out months lower rollover frequency but may carry different basis.
• Decide between standard, E‑mini, or micro contracts to match risk appetite.

5) Place the order (order types and execution)

• Order types: market (immediate execution at current price), limit (execute at specified price or better), stop (trigger a market order at a price), stop‑limit (trigger a limit order), and advanced ladder/DOM entries via the depth-of-market interface.
• Be mindful of slippage and liquidity. Use limit orders if you require execution price control; use market orders for speed in highly liquid markets.
• Order routing and execution venue can affect fills and fees.

6) Monitor, manage, and close/roll positions

• Daily mark‑to‑market will credit or debit your account based on price movement.
• Manage positions using stops and profit targets; update margin buffers if volatility rises.
• Rolling: before expiry, close the near month and open the next month to maintain exposure; account for spread and transaction costs.
• If holding to expiration, follow settlement procedures and be prepared for cash settlement or physical delivery implications.

Fees, Costs and Margin Rules

Common fees and cost components

• Commissions: per‑contract commissions charged by brokers; vary by broker and account tier.
• Exchange and clearing fees: small per‑contract fees assessed by exchanges and clearinghouses.
• Platform fees: subscription or advanced data/market depth fees for premium tools.
• Financing costs: for some synthetic positions or if broker extends financing, borrowing costs may apply.

Margin and volatility effects

• Margin requirements rise with higher volatility and near expiries. Exchanges and brokers can impose intraday or emergency margin increases.
• Compare fee schedules across brokers and examine how margin calls are handled (timing, notifications, and auto‑liquidation policies).

Risks and Risk Management

Primary risks

• Leverage & large losses: leverage magnifies losses; futures can wipe equity quickly.
• Margin calls: sudden adverse moves can trigger margin calls or forced liquidation.
• Contract expiry/roll risk: mismatch between futures and cash market or failure to roll timely can create unexpected P/L.
• Liquidity risk: less liquid contracts have wider spreads and higher slippage.
• Gap risk: markets can gap on news, causing stop orders to fill at worse prices.

Recommended risk controls

• Position sizing: limit exposure relative to account equity; calculate worst‑case loss scenarios before trading.
• Use stop orders and mental stops: place protective stops, but understand they may not guarantee execution at the stop price in a fast market.
• Diversify: use index futures for broader exposures rather than concentrating in a single stock when appropriate.
• Use micro or mini contracts for smaller capital and scaling in/out of positions.
• Practice with simulated/demonstration accounts before risking real capital.

Strategies and Common Use Cases

• Speculation: directional trades using leverage for short‑term moves.
• Hedging an equity portfolio: short index futures to offset equity exposure or buy puts and use futures to fine‑tune risk.
• Arbitrage / cash‑and‑carry: capture pricing differences between spot and futures, especially around dividends and carry costs.
• Pair trades: long one single‑stock future and short another to capture relative value.
• Synthetic stock positions: combine futures and cash positions to replicate long or short stock exposure when direct stock ownership is impractical.

Regulatory and Tax Considerations

Regulatory oversight

• Futures markets are supervised by regulatory bodies (in the U.S., the Commodity Futures Trading Commission and self‑regulatory organizations) that set rules for trading, clearing, and reporting.
• Brokers and clearing firms operate within this framework and must disclose risks, margin rules, and client protections.

Tax treatment (U.S. context)

• Many futures contracts are subject to specific tax rules (e.g., Section 1256 mark‑to‑market treatment in the U.S. for certain exchange‑traded futures), which can result in 60/40 long‑term/short‑term capital gains treatment regardless of holding period.
• Tax treatment depends on contract type, jurisdiction, and whether positions are held in taxable vs retirement accounts.
• As of the latest reporting cycles, consult a qualified tax professional for your personal situation.

Choosing a Broker or Platform — Evaluation Checklist

Practical criteria when comparing brokers

• Contract availability: single‑stock, index, mini/micro contracts.
• Margin requirements and intraday vs overnight rules.
• Fee schedule: commissions, exchange, clearing, and platform fees.
• Trading platform features: ladder/DOM, order types, automated order routing, charting, backtesting.
• Clearing, custody, and client protections.
• Demo accounts and educational resources.
• Customer service responsiveness and regulatory registration.

For crypto derivatives or products that tie to crypto assets, consider Bitget as a platform option and use Bitget Wallet for custody where appropriate. Always confirm that the broker or platform is registered with relevant regulators in your jurisdiction.

Practical Tips for Beginners

• Start with education: read contract specs and watch tutorial videos or use broker educational materials.
• Use demo accounts to practice order routing, stops, and rolling.
• Begin with micro contracts to limit notional exposure.
• Set clear risk limits per trade and per day.
• Read contract specifications carefully, including settlement, tick size, and last trading day.
• Keep extra cash in your account to meet unexpected margin calls.

Glossary of Common Terms

• Futures contract: a standardized agreement to buy/sell an asset at a future date and price.
• Initial margin: the minimum capital required to open a futures position.
• Maintenance margin: the required minimum equity to keep a position open.
• Mark‑to‑market: daily valuation of futures positions with gains/losses posted to accounts.
• Tick: the minimum price increment of a futures contract.
• Notional value: contract size multiplied by futures price, representing gross exposure.
• Roll: closing a near expiry contract and opening a later expiry to maintain exposure.
• Settlement: the process and terms by which a contract is closed at expiry (cash or physical).
• E‑mini/Micro: smaller‑sized futures contracts that reduce notional per contract.
• Single‑stock future: a futures contract on a single equity.
• Perpetual futures (crypto): derivative contracts without expiry that use funding rates instead of settlement.

Further Reading and Sources

Sources and guides to consult before trading (examples of widely used educational resources and broker documentation):

• Exchange contract specification pages and official exchange notices.
• Broker how‑to guides and commission/margin schedules.
• Investopedia: futures trading overviews and how‑to articles.
• E*TRADE / Charles Schwab / tastytrade educational pages (for futures basics and retail process descriptions).
• Market research and exchange education centers that cover contract specs and clearinghouse rules.

Contextual industry note (crypto markets and ETF adoption)

As of Jan. 9, 2026, according to CryptoSlate reporting (citing Farside data), the U.S. spot Bitcoin ETF complex had accumulated approximately $56.63 billion in net inflows since launch. The reporting highlighted IBIT net inflows of about $62.65 billion and GBTC outflows near −$25.41 billion, with the complex averaging roughly $113.3 million in daily net flows over that period. First‑day trading volume for U.S. spot Bitcoin ETFs reached about $4.6 billion on Jan. 11, 2024. These figures illustrate how wrappers such as ETFs can alter access and distribution for an asset class, which is relevant context when comparing traditional stock futures distribution and crypto derivatives markets. Source: CryptoSlate (reporting based on Farside and market data).

See Also

• Stock options
• Margin trading
• Commodity futures
• Perpetual crypto futures
• Portfolio hedging techniques

Notes and Disclaimers

Futures trading carries substantial risk. Losses can exceed initial capital. This article is educational and not investment advice. Consult licensed professionals, read broker and exchange documentation, and use demo accounts where possible before trading with real funds.

References

• Exchange contract specification documents and broker guides (examples: major broker educational pages).
• Investopedia educational articles on futures and derivatives.
• Industry coverage and reporting: CryptoSlate (reporting as of Jan. 9, 2026, citing Farside data and market sources) for ETF flow context.

Appendix: Quick Checklist — Before You Buy

• Confirm contract specs and settlement type.
• Verify margin requirements and fund the account with a buffer.
• Practice order entry in a demo account.
• Start with micro/mini contracts if available.
• Have a written entry, exit, and risk management plan.

Ready to learn more? Explore Bitget’s educational resources and consider opening a futures‑enabled account to practice with demo funds and small micro‑contract positions. Remember: prioritize learning and risk controls before scaling positions.