Unlike the traditional futures contract risk‐based approach to margining, new security futures contracts are margined under a strategy‐based margining system similar to that which applies in the equity options markets. As a result, these new margin requirements are potentially much less...

The S&P 500 Index futures contract is traded on the Chicago Mercantile Exchange that isregulated by the Commodity Futures Trading Commission. The S&P 500 Index optionscontract is traded on the Chicago Board of Options Exchange that is regulated by theSecurities and Exchange Commission. The...

Cash settlement of derivative contracts makes them susceptible to manipulation by traders who expect to close large positions upon final settlement. Cash settlement also increases underlying volatility when hedgers unwind their hedges if they have no incentives to control their trading costs....