SEC Moves on Stock Futures
Traders Magazine, May 2002
Stock future sales must now include in the final settlement price of cash-settled security products the opening price of the underlying security, according to new rules just adopted. The Securities and Exchange Commission also required an immediate halt in trading of single stock futures when trading in the underlying security stops. The new SEC orders also apply to narrow-based index products. Trading in the security will be halted when a halt occurs on one or more of the underlying securities, representing 50 percent or more of the market capitalization of the index future, according to SEC officials. They said that this method will allow participants to maintain proper hedge positions while preventing circumvention in halts of the underlying securities.
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