How far into the future is a stock future?  How do stock futures work?
Context is key here. Futures don't really have to do with a time in the future in this context.  Futures are a capital market (futures market), just like Stocks are a market (stock market). Both capital markets have the ability to affect each other. Up until 30 years ago there was a separate use for the futures market, but in the days since they are MOSTLY used for stock derivatives (financial futures are the most widely traded contracts since 1980, hugely eclipsing the commodity futures that the market was designed for.)  So there is overlap and one affect the other, I'm not going to go into too much detail here but basically the futures market trades 24 hours a day, 6.5 days of the week and the  stock market trades 8-12 hours a day, 5 days a week.  So when the stock market closes, the futures market is still running will react and effect the broad stock market.  Hope that gets you started in your research "Futures are an agreement to buy or sell something in the future.  The futures ""price"" is the price at which you agree to make the trade.  This price does not indicate what will happen in the future so much as it indicates the cost of buying the item today and holding it until the future date.  Hence, for very liquid products such as stock index futures, the futures price is a very simple function of today's stock index value and current short-term interest rates.  If the stock exchange is closed but the futures exchange is open, then using the futures price and interest rates one can back out an implied ""fair value"" for the index, which is in essence the market's estimate of what the stock index value would be right now if the stock market were open.  Of course, as soon as the stock exchange opens, the futures price trades to within a narrow band of the actual index value, where the size of the band depends on transaction costs (bid-ask spread, commissions, etc.)."
"This doesn't really make that much sense either. The amount of ""can't predict"" should be pretty consistent on a whole market basis. Even if stock markets aren't perfectly efficient, they're efficient enough that you can't predict that there will be less information risk in the future. Even with information risk, the stock market throughout history, trends one way, up. Not being invested is the surest way to miss that." There is indeed a market for single stock futures, and they have been trading on the OneChicago exchange since 2002. Futures are available in 12,509 individual stocks, according to the exchange's current product listing. One advantage they offer over trading the underlying stock is the significantly higher leverage that is available, combined with the lack of pattern day trader rules that apply to stocks and similar securities. Single stock futures have proven to be something of a regulatory challenge as it has been unclear whether their oversight is the remit of the SEC/FINRA or the CFTC/NFA. "Here, check out my updated reply above - I added an example that might clarify some of your questions?  Also, to answer the ""to whom"" question, you're signaling those things to the market. By trading at what you believe to be fair value, you're helping the market price all of those ""events"" contained in a futures contract." The time horizon applicable to the price target is always specified by the broker or bank which published the research report.  You will find this information in the disclaimer, which is present on every research report. Usually it is 12 months, but some firms give 6 months price targets. However, you should never rely on the price target alone and always combine it with the following details (to name a few): Are the analyst's estimate above or below consensus estimates (or company guidance), did the analyst rise or lower its estimates. What is the rating on the stock (Buy, Sell, Hold...), when did he change his rating or price target.  Does the firm do business with the company? (which may influence a bullish tone and optimistic price target). As others have pointed out, they do in fact exist.  But it may be worth pointing out a possible reason that they are not as popular as commodities futures. If I want exposure to the oil market (for example,) buying oil futures has a big advantage over buying oil. Namely, I don't actually need to store the oil; I can roll over my position rather than taking delivery. On the other hand, buying single stock futures does not have such a compelling advantage over buying the stock itself, so most people would simply do the latter.  (Although stock futures might provide some other advantages in some very specialized situations.) "When you buy a stock, you're really paying for a STREAM of earnings, from now till whenever. The job of an investor is to figure out how large that stream will be in the future. But if the stock price were the same as ""earnings"" (for one year), it would mean that you would get all future earnings for ""free."" That's not likely to happen unless 1) the company is in liquidation,"" meaning ""no future"" and 2) it earned ALL of the money it ever earned in the past year, meaning ""no past."" If there are likely to be any earnings in the future, you will have to pay for those future earnings, over and above what was earned in the most recent year." Futures contracts are a member of a larger class of financial assets called derivatives. Derivatives are called such because their payoffs depend on the price of other assets (financial or real). Other kinds of derivatives are call options, put options. Fixed income assets that mimic the behavior of derivatives are callable bonds, puttable bonds etc.  A futures contract is a contract that specifies the following: Just like with any other contract, there are two parties involved. One party commits to delivering the underlying asset to the other party on expiration date in exchange for the futures price. The other party commits to paying the futures price in exchange for the asset. There is no price that any of the two parties pay upfront to engage in the contract. The language used is so that the agent committing to receiving the delivery of the underlying asset is said to have bought the contract. The agent that commits to make the delivery is said to have sold the contract.  So answer your question, buying on June 1 a futures contract at the futures price of $100, with a maturity date on August 1 means you commit to paying $100 for the underlying asset on August 1. You don't have to pay anything upfront. Futures price is simply what the contract prescribes the underlying asset will exchange hands for. "As I stated in my comment, options are futures, but with the twist that you're allowed to say no to the agreed-on transaction; if the market offers you a better deal on whatever you had contracted to buy or sell, you have the option of simply letting it expire. Options therefore are the insurance policy of the free market. You negotiate a future price (actually you usually take what you can get if you're an individual investor; the institutional fund managers get to negotiate because they're moving billions around every day), then you pay the other guy up front for the right of refusal later. How much you pay depends on how likely the person giving you this option is to have to make good on it; if your position looks like a sure thing, an option's going to be very expensive (and if it's such a sure thing, you should just make your move on the spot market; it's thus useful to track futures prices to see where the various big players are predicting that your portfolio will move). A put option, which is an option for you to sell something at a future price, is a hedge against loss of value of your portfolio. You can take one out on any single item in your portfolio, or against a portion or even your entire portfolio. If the stock loses value such that the contract price is better than the market price as of the delivery date of the contract, you execute the option; otherwise, you let it expire. A call option, which is an option to buy something at a future price, is a hedge against rising costs. The rough analog is a ""pre-order"" in retail (but more like a ""holding fee""). They're unusual in portfolio management but can be useful when moving money around in more complex ways. Basically, if you need to guarantee that you will not pay more than a certain per-share price to buy something in the future, you buy a call option. If the spot price as of the delivery date is less than the contract price, you buy from the market and ignore the contract, while if prices have soared, you exercise it and get the lower contract price. Stock options, offered as benefits in many companies, are a specific form of call option with very generous terms for whomever holds them. A swaption, basically a put and a call rolled into one, allows you to trade something for something else. Call it the free market's ""exchange policy"". For a price, if a security you currently hold loses value, you can exchange it for something else that you predicted would become more valuable at the same time. One example might be airline stocks and crude oil; when crude spikes, airline stocks generally suffer, and you can take advantage of this, if it happens, with a swaption to sell your airline stocks for crude oil certificates. There are many such closely-related inverse positions in the market, such as between various currencies, between stocks and commodities (gold is inversely related to pretty much everything else), and even straight-up cash-for-bad-debt arrangements (credit-default swaps, which we heard so much about in 2008)." If you hold a future plus enough cash collateral it is economically equivalent to owning the underlying asset or shorting the underlying asset. In general financial assets such as stock indices have a positive expected return - that's the main difference between investing and gambling. There's nothing that special about futures, they are just another contractual form of asset ownership.  Well, one difference is that regulations or brokerages allow individual investors more leverage with options and futures than with straight borrowing. But this is more a regulatory issue than a conceptual issue with the securities themselves. In theory regulators or brokers could require you to hold enough collateral to make a future equivalent to buying the underlying. "Nobody has mentioned the futures market yet. Although the stock market closes at 4pm, the futures market continues trading 24 hours a day and 5.5 days a week. Amongst the products that trade in the future market are stock index futures.  That includes the Dow Jones, the S&P 500. These are weighted averages of stocks and their sectors. You would think that the price of the underlying stock dictates the price of the average, but in this day and age, the derivative actually changes the value of the underlying stock due to a very complex combination of hedging practices. (this isn't meant to be vague and mysterious, it is ""delta hedging"") So normal market fluctuations coupled with macroeconomic events affect the futures market, which can ripple down to individual stocks. Very popular stocks with large market caps will most certainly be affected by futures market trading. But it is also worth mentioning that futures can function completely independently of a ""spot"" price. This is where things start to get complicated and long winded. The futures market factor is worth mentioning because it extends even outside of the aftermarket and pre-market hours of stock trading." No, you cannot.  The cash settlement period will lock up your cash depending on the product you trade. Three business days for stocks, 1 business day for options, and you would need waaaaaay more than $5,000 to trade futures. "I think that pattern is impossible, since the attempt to apply the second half would seem to prevent executing the first. Could you rewrite that as ""After the stock rises to $X, start watching for a drop of $Y from peak price; if/when that happens, sell."" Or does that not do what you want? (I'm not going to comment on whether the proposed programmed trading makes sense. Trying to manage things at this level of detail has always struck me as glorified guesswork.)" R/stockmarket is probably the best.  When I have some free time I can test that strategy back as long as you would like in quantstrat, although the only problem with testing futures is joining the consolidated contracts, however I can test it with SPY as SPY returns and ES_F track very closely. "@jidugger mostly got it right. It basically mean that past performance of a stock, or a basket of stocks, are not at all useful when trying to predict its future. There is no proven correlation between past and future performance. If there was such a correlation, that was ""proven"" or known, then investors would quickly exploit this correlation by buying or selling this stock, thus nullifying the prediction. It doesn't mean the specific individuals cannot predict the future stock market - hell, if I set up 2^100 different robots, where every robots gives a different series of answers to the 100 questions ""how will stock X do Y days from now"" (for 1<=Y<=100), then one of those robots would be perfectly correct. The problem is that an outside observer has no way of knowing which of the predictor robots is right. To say that stock is memoryless strikes me as not quite right -- to   the extent that stocks are valued based on earnings, much of what we   infer about future earnings relies on past and present earnings. To put it another way - you have $1000 now, and need to decide whether to invest in a particular stock, or a stock index. The ""memoryless"" property means that no matter how many earning reports you view ... by the time you see them, the stock price already accounts for them, so they're not useful to you. If the earning reports are positive, the stock is already ""too high"" because people bought it before you did. So on average, you can't use this information to predict the stock's future performance, and are better off investing in an index fund (unless you desire extra risk that doesn't come with more profitability)." Most US banks don't allow you the ability to draft a foreign currency check from USD. Though, I know Canadian banks are more workable. For instance, TD allows you to do this from CAD to many other currencies for a small fee. I believe even as a US Citizen you can quite easily open a TD Trust account and you'd be good to go. Also, at one time Zions bank was one of the few which lets US customers do this add-hoc. And there is a fee associated. Even as a business, you can't usually do this without jumping thru hoops and proving your business dealings in foreign countries. Most businesses who do this often will opt to using a payment processor service from a 3rd party which cuts checks in foreign currencies at a monthly and per check base. Your other option, which may be more feasible if you're planning on doing this often, would be to open a British bank account. But this can be difficult if not impossible due to the strict money laundering anti-fraud regulations. Many banks simply won't do it. But, you might try a few of the newer British banks like Tesco, Virgin and Metro.