Schwab Launches Single Stock Futures for Retail Traders | LeapRate
Charles Schwab said Wednesday that it has launched Single Stock Futures for more than 50 prominent US stocks.
Charles Schwab Futures & Forex explained that the cash-settled contracts, available now on its thinkorswim trading platforms and traded on the Chicago Mercantile Exchange, are based on the underlying price movement of an individual company at a set future date.
Each standard contract represents 100 shares of the underlying stock, covering names across the S&P 500 and Nasdaq-100.
The broker noted that the products require less initial capital than buying a stock outright, offer a way to react to news outside standard market hours, and allow investors to take a short position without stock borrow fees or short-sale restrictions.
They also let traders take a position on a stock without option-specific factors such as time decay.
“Adding Single Stock Futures expands the breadth of our trading offering and strengthens our position as a destination for retail traders,” commented James Kostulias, managing director and head of trading services at Charles Schwab.
He added that with index futures already representing about 75% of the firm’s futures trading volume, there was strong demand for the next evolution in futures trading, including from clients who have historically traded stocks.
Schwab, which reported $13.08 trillion in total client assets in the second quarter, cautioned that disciplined risk management is essential with leveraged products, which can result in substantial losses exceeding the initial investment.
