AAPL Futures – Key Considerations

 

Bottom line: Futures on AAPL do exist, but due mainly to the lack of liquidity, there aren’t many clear advantages of AAPL futures vs AAPL stock.

 

Can I actually trade AAPL futures?

Yes, through the OneChicago futures exchange.  AAPL is offered as a Single Stock Future (SSF) with the main symbol being AAPL1D.  

The contracts generally represent exposure to 100 shares, and multiple expiration dates are available.  The clearing is done through the Options Clearing Corporation (OCC).

 

What are the advantages of AAPL futures vs AAPL stock?

In theory, single stock futures have some substantial potential advantages over their stock counterparts – mainly increased leverage, reduced margin, and lower taxes for active traders.  Other advantages are mentioned below.

 

What are the actual advantages of AAPL futures?

In practice, a key thing to consider is the general illiquidity of the contracts.  For example, even though AAPL1D is one of the more active SSF contracts, it’s not uncommon for less than 20 contracts to be traded in a single day.  This generally results in bid/ask spreads that far exceed what could be equivalently found in the AAPL stock or options markets.

So while futures do offer better tax rates for short term traders (60/40 treatment vs 100% short term capital gains rate for stock trades),  any tax advantage gained would be likely wiped out by simply crossing the bid/ask spread.

Regarding the increased leverage (relative to margin/cash requirements for stocks) that AAPL futures would offer, again the high effective transaction cost for active traders would most likely negate any margin advantages.

 

Other notes regarding AAPL futures and SSFs in general

For a broader description of Single Stock Futures, please check here and here.  These articles dig deeper into other considerations for trading SSFs, such as dividend projection risk, margin calculations, embedded interest rates, among other items.

Overall, AAPL futures (and SSFs in general) are interesting products and could be advantageous for the right type of trader – but for the majority of traders, the lack of liquidity would generally be a non-starter.

 

 

 

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