WHAT IS DIFFERENCE BETWEEN DAILY CASH AND DAILY FUTURE?? (Is daily future = rolling?)

[spanish89]

Im starting on Tradindex and am going to be day trading the Ftse 100 mainly, but what is the difference between the 'Daily cash' and the 'Daily future'??

Is daily cash ending a bet that ends at close of trading that day, and daily future a rolling daily bet that only ends when you chose to close it???

 

[dbphoenix]

Any special reason why your threads are always in caps?

 

[whipsaw]

Just a quicky (but I'm bot sure if you refer to the term or the specs behind)

Cash means Index as Underlying (e.g. DAXI)
Future means: Future of the Index (e.g. FDAX) as underlying

Dow Jones Ind. Avg (Cash) vs. DJ Future (Future)

etc

Futures have an expiry date, changing every 3 month (march, june, sept, dec)

 

[spanish89]

Any special reason why your threads are always in caps?

Um i guess inside some big-headed part of me just feels that my questions are more important than anyone elses, and so i think that making my threads stand outas much as possible will make them seem more urgent and important, so therefore i will get priority! LOL

Nah im not big-headed really..

 

[spanish89]

Just a quicky (but I'm bot sure if you refer to the term or the specs behind)

Cash means Index as Underlying (e.g. DAXI)
Future means: Future of the Index (e.g. FDAX) as underlying

Dow Jones Ind. Avg (Cash) vs. DJ Future (Future)

etc

Futures have an expiry date, changing every 3 month (march, june, sept, dec)

Aloha, um i know im going to sound really really dumb now...

But is there any way you could please actually even simplify your answer anymore???


My current understanding of your answer is that 'daily cash' is buying the contract right now at current price.., an dthen have to sell later before close of trading that day.

But 'daily future' means buying the contract only once its reaches the price indicated (expected future price), but then that is a rolling daily contract that you can hold till upto then end of the month.


Am i completely wrong though, or just partially???


Many thanks for you help though mate.

 

[whipsaw]

Am i completely wrong though, or just partially???

To explain terms in another Language than the mother language is always difficult, but i want to try it

First:
Every contract has an underlying. Punktum!

The underlying could be an index, an equity, bond, commodity whatever. Usually traders are primary interested in the cash market. They have access to realtime quotes, times and sales etc. so it is much easier to compare.

You can trade these underlyings directly (stock or commodity exchange) or OFF exchange (OTC) with several brokerage companies.
If you are interested in trading leverage products you have to use FSB, CFD, Options or Futures.

With FSB (also with CFDs) you have the opportunity to invest a small amount of money to participate in movements of your prefered underlying.

FSB = Invest a Stake per Point/ Tick/ Pip
CFS = Size

FSB
Stake: 1 € per point = You win/ lose 1 € per Point of the movement of the underlying, Stake 5 per Point = You win/ lose 5 € per Point of the movement of the underlying,

CFD:
Margin 20 %
Size: For 1 Point you leverage with factor 5


Difference between Cash and Future:
Cash like said is always the traded underlying/ or calculated index
The future is also a contract, but instead of a stock exchange it will be traded on a futures exchange. The price is a result of all buy and sell orders in a certain underlying instrument, usually futures. The futures have other characteristics/ specs like regular contracts.

For trading purpose the future market could be/ will be used as indication in which direction the underlying will move.
If you have access to future prices you can compare cash and future. If the future goes down, the cash will follow etc. (its a bit more different in reality)

Here a little more to read from wikipedia
Futures contract - Wikipedia, the free encyclopedia

Future prices you can get (15 minutes delay) directly from the Eurex - THE marketplace for those products

Eurex - Europe's Global Financial Marketplace

 

[alphahunter]

Being a pure stock / share / equity man , e.g. I would still be trading in certificates if I was given the opportunity. However I sometimes use indices (spreadbets) when I wish to protect my equity portfolio from a minor consolidation. Hence I would like to better understand the difference between the two.

I believe that cash index is basically the sum of the constituents as of NOW, refreshed every that many seconds (is it 15sec?) and that futures is a contract to deliver the underlying consitutents at the expiry date [and in reality they never get delivered and/or is hedged straight away with a basket of cash underlyings].

Having said that, could you tell me what drives the difference between the two prices? I sniff that interest rates (to expiry), dividends and skew may play a role but would you mind confirming it. I appreciate I could check over the internet but if an answer is ready, I'll appreciate.
Thanks.

 

[Jon41]

My simple understanding of this - and I could be missing some details - is:

Daily cash - market shuts at 16.30 (or whenever the local exchange closes) so only runs during exchange hours and is based on the cash price without divs etc playing a part
Future - price is derived from the underlying futures price in that market and is for a named contract, which will expire at a predefined date e.g. FTSE currently offering a March and June future that are actively traded in.
Rolling Daily - a bit like a combination of the two, it is a price derived from a blend of cash and future prices but importantly does not expire. So you can open a position in a Rolling Daily and hold it for literally years. Should be available to trade pretty much 24 hours a day. There will be an adjustment made for divs etc when applicable.

From my experience of spread betting and CFD punters, the VAST majority of trades are on a Rolling Daily market, they usually offer the tightest spreads and larger bets and longer trading hours so would recommend you stick with them.