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index future

U

uktous

Member
hi,

suppose we take a long position in an index future.

At the end of the term of the future, if we don't "sette" it, what diversity will we take?

For example, we will take a bond under a bond future. But what we will take under an index future?
 
In theory the seller could physically deliver the index - ie deliver a portfolio of stocks that exactly replicated the index at expiry. However this would be an almighty hassle for seller and buyer so in practice the contract would be cash settled.
 
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