Stock Market vs Futures Market

Stock Market

• The stock of a company can be held as long as the investor wants, therefore stock has unlimited life.

• A company may have variety of stocks, for example for new project the company may issue different shares to fund the project.

• The share of a company is paid upfront in full. If the share price of ABC company is $50 then it must be paid $50 at purchase per share. 

Futures Market

• The future contracts expire at maturity, therefore futures contract has limited life. 

• There are only one standard futures contract in a specific futures market for specific future contract, the future contract is standardized.

• The margin of the futures are paid to create financial leverage. The futures contract is also paid at the expire date.