rading in financial fumes currently accounts for roughly 35% of all futures T contracts, and it promises to become an even larger share of the market.
Among those assets in which futures contracts are now traded are stock indices. Futures contracts on the Vdue4he Composite Average opened on February 24, 982, on the Kansas City Board of Trade. Contracts on the Standard and Poor's 500 index began to be traded on April 21, 1982, at the Chicago Mercantile Exchange, and the New York Futures Exchange began offering futures contracts on the New York Stock Exchange's composite index on May 6, 1982. S i c e their introduction, these contracts have been well received in the market place. They have already been put to a variety of uses which include hedging in block trades, managing risks in underwriting stock issues, portfolio management, and speculation.' Moreover, other stock index contracts have been proposed by the above exchanges as well as the New York Commodity Exchange, the Chicago Board of Trade, and the Chicago Board Options Exchange.
Investing in these markets requires a clear understan-of each contract market and its idiosyncratic features as well as the relationship between the futures prices and the spot prices. In the first part of this article we compare and contrast the three stock index futures contracts that are currently being traded. Our comparative analysis includes a discussion of contract size, delivery dates, delivery concept, margins, minimum price change, daily price change limits, and the extent to which the various contracts are substitutes for each other. We provide in 'These uses have been discused by many authors. They include NiederhoEer, Victor, and Zeclrhauser, Richard (1980) "Market Index Futures Conrracts," F i n a n d A d y s & .bud January-February: 49-55; and Figlewski Stephen, and Kon, Stauley 0982) "Portfolio Management with Stock Index Futures," F i n a n d Analysts l o u d January-February: 526c.