FUTURES AND OPTIONS ON ROFEX 20 INDEX
Directives and Notices
The ROFEX 20 Stock Index is a total return index, designed to measure the performance of a portfolio made up of the twenty most liquid stocks traded in the markets under the jurisdiction of the Argentine Republic and weighted by their market capitalization. The methodology used in the ROFEX 20 Stock Index follows the standards of the main stock indices in the world.
Each of the component companies is weighted considering its stock market equity adjusted by free float1, thus allowing the relative weight of each company in the index to be representative of the effective availability in the market.
A total return index is a type of index that measures the price movements of the component stocks and additionally assumes that dividends paid to shareholders are proportionally reinvested in the index portfolio.
Among the main advantages of trading ROFEX 20 index futures we can mention the following:
- Efficient use of capital: futures trading on stock indices allows exposure to a portfolio of stocks, immobilizing a fraction of its value as margins, being able to invest the remaining balance in other assets.
- Risk diversification at low cost. Futures trading on stock indices allows you to quickly and efficiently take exposure to a basket of stocks, with the consequent savings in diversification expenses.
- Hedging on a portfolio of shares correlated with the ROFEX 20 share index.
- Possibility of positioning up or down in a leveraged way.
- Possibility of arbitration between the future of the ROFEX 20 index and the spot market.