Index futures allow traders to speculate on the future price of a financial index or hedge their equity positions. They are contracts that let an investor buy or sell an index, such as the S&P 500, at a set price today for settlement at a future date. Both speculators and investment managers use index futures, with speculators betting on the market's direction and managers hedging their stock portfolios against potential losses.

13. What Are Index Futures?
Index futures are futures contracts whereby a trader can buy or sell a financial index today to be
settled at a future date. Traders use index futures to speculate on the price direction of an index
such as the S&P 500.
Investors and investment managers also use index futures to hedge their equity positions
against losses.
KEY TAKEAWAYS
•Index futures are contracts to buy or sell a financial index at a set price today, to be settled at a
date in the future.
•Portfolio managers use index futures to hedge their equity positions against a loss in stocks.
•Speculators can also use index futures to bet on the market's direction.
•Some of the most popular index futures are based on equities, including the E-mini S&P 500,
E-mini Nasdaq-100 and E-mini Dow. International markets also have index futures.

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