Developed by CME Group, the world’s largest derivatives exchange, SQFs are designed for traders who demand simplicity, transparency, and direct access to major global markets. Whether you’re targeting major indices like the S&P 500, SQFs offer everything you need to trade smarter.
Understanding futures contracts
Futures are exchange-traded agreements in which two parties commit to buy or sell an asset, such as oil, gold, or an equity index, at a predetermined price on a specified future date.
On eToro, all futures contracts are cash-settled, meaning there’s no physical delivery of the asset. The costs associated with holding the asset (interest, dividends, etc.) are factored into the price of standard futures.
What is futures trading?
Futures trading enables investors to speculate on the future price movements of popular assets. If you anticipate that an asset’s price will rise, you can purchase a futures contract. Conversely, if you expect a price decline, you can sell a futures contract. Your profit or loss is determined by the difference between your entry and exit prices, minus any trading costs.
Trading futures on regulated exchanges like CME Group ensures a transparent and secure marketplace, as the exchange acts as the buyer to every seller and the seller to every buyer.
What are Spot-Quoted Futures (SQFs)?
SQFs are the streamlined way to trade futures. We bring the essential benefits of futures trading, such as capital efficiency and transparent market access, directly to retail investors, whilst removing the complexity associated with traditional futures.
Traditional futures use forward curves for pricing, but SQFs work differently: they track today’s real-time spot price. What’s more, SQFs have an annual expiry, eliminating the need for monthly or quarterly rollovers.
Why trade SQFs?
- Smaller size, greater cost efficiency
Trade on margin using small-sized contracts. SQFs now make it even more capital-efficient to trade futures markets. - Keep your strategy intact: Annual expiry
With an annual expiry, you have no need to roll your positions monthly or quarterly. This cuts down on roll-over costs and provides a smoother, simpler environment for managing long-term trades. - Spot-based pricing
Designed to stay close to the real-time spot price, SQFs can be easier for traders transitioning from shares or CFDs to understand. - Transparent pricing, professional markets.
SQFs are traded on one of the world’s largest exchanges, providing exchange-level transparency and liquidity. Now you can trade on the same prices as the pros.
How spot-based pricing works
Unlike traditional futures priced using forward curves, SQFs closely track the current or “spot” market price. An annual expiry eliminates the need for monthly or quarterly rollovers.
How do Spot-Quoted Futures (SQFs) work?
SQFs work by tracking the spot price rather than the future price, whether that’s on global assets such as Bitcoin, the S&P 500, or the NASDAQ100.
Spot-Quoted Futures (SQFs) vs. CFDs
Like CFDs, SQFs are a derivative product. You can go long or short and they are both traded on margin, which makes them capital efficient.
SQFs differ in that they are traded on the world’s largest derivatives exchange, which levels the playing field and gives you access to the same price opportunities as the pros. With SQFs you may also pay less financing charges on overnight positions, making them a cost-effective way to trade.
Explore Spot-Quoted Futures on eToro and find out how they can fit into your trading strategy.
Spot Quoted Futures involve significant risk and are not suitable for all investors.
You may lose more than your initial investment due to the underlying assets’ price volatility.
Please ensure you understand the risks involved.