NEW! Spot-Quoted Futures: Simpler, Smaller, and Built for the Modern Trader

On June 30, the CME Group –  in keeping with the title of the world’s leading derivative marketplace, is launching a new class of contracts—Spot-Quoted Futures (SQFs)—designed to make trading equity indexes and cryptocurrencies simpler, smaller, and more intuitive. These contracts are tailored to traders who want to follow the cash index or spot price, but still enjoy the benefits that traditional futures have. If you currently trade ETFs like the SPY or QQQ, Index Options like the SPX, or trade spot quoted crypto products, these CME based products are something you’ll want to consider.

What Are Spot-Quoted Futures?

Spot-Quoted futures are a recent innovation in trading, designed – as the name implies – to trade at the same spot price (i.e. the cash index level) as the underlying assets. The initial listing will be available for trading on six popular products: Bitcoin, Ethereum, S&P 500, Nasdaq-100, Dow Jones Industrial Average, and the Russell 2000.

The contract specifications you can see here are courtesy of the CME Group:

How Do SQFs Work?

Spot-Quoted futures maintain close alignment to the spot market through a daily financing adjustment, which is added separately to the account balance rather than being priced into the contract itself.

So instead of embedding financing costs (like interest or carry) into the price, the CME will provide calculations and apply a daily adjustment to reflect if you were holding a traditional futures product.

This structure ensures traders can:

• Trade off the actual spot price when entering and exiting.
• Understand their returns more clearly, especially if using ETFs or indices to offset or inform trading decisions.
• Manage longer-term positions without needing to roll contracts monthly or quarterly.

Understanding the Financing Adjustment

This is the cornerstone of the SQF structure. Unlike traditional futures, where the basis is built into the trade price, SQFs separate the financing adjustment and post it directly to your account. Here’s how it works:

• Every trading day, CME calculates the basis (difference between futures settlement and spot index level).
• The change in this basis from the previous day is the daily financing adjustment.
• This amount is added to or subtracted from your P&L.

Key point: If you open and close a position on the same day, this financing adjustment has no impact. It only matters for positions held overnight or longer.

Comparing Spot-Quoted Futures to Traditional Futures

Benefits of Spot-Quoted Futures

These contracts will be much smaller than the mini or micro futures counterparts, giving traders greater flexibility when it comes to putting on contracts and managing positions.

Take for example the S&P 500. Currently you can trade the ES (E-mini SP 500 Futures) which has a contract size of $50 times the index. This means if the ES is trading at 5000.00 the notional value of one contract is $250,000, and for the MES, which is one-tenth the size, the notional value of one contract would be $25,000. With Spot-Quoted futures, the contracts are much smaller for the S&P the value is $1 times the index point which taking from the aforementioned the notional value is $5000.

Another benefit of Spot-Quoted futures compared to traditional futures is the contracts don’t expire each quarter. With traditional index futures each March, June, September, and December you have to worry about rolling over to the next contract ahead of expiration. With Spot-Quoted futures the expiration would be over 1 year, so the first contract would not expire until June 2026 allowing you to focus less on contract expiry and more on your trading strategy.

In addition, because these products are quoted at the cash or spot price, there are no longer complex future value formulas as their price will be in tandem from what you see reported by major financial news sources such as CNBC, The Wall Street Journal, Bloomberg, or anywhere else you receive financial news.

Given the smaller size, margin requirements will also be much less with initial margins set by the exchange–as low as $100–to provide greater capital efficiency. Still, as with any leveraged product, it’s important to manage risk carefully, as leverage can magnify both gains and losses.

Being listed on the CME means these are also CFTC regulated products which provides additional transparency and centralization that many OTC and off book platforms do not. This means these contracts allow for institutional-grade trading environments yet are still accessible for the smaller sized trader.

Final Thoughts

Spot-Quoted futures represent a major modernization of the futures landscape. By combining spot-level pricing, low notional exposure, and transparent financing mechanics, the CME Group has built a product that addresses long-standing friction points for individual and crossover traders.

If you’ve been hesitant to trade index or crypto futures due to complexity, contract size, or pricing mismatch with the spot market—Spot-Quoted futures might be the structure you’ve been waiting for.

Start trading Spot-Quoted futures with EdgeClear from June 30th. Contact Hess, or your EdgeClear broker, to learn how to get started.

Disclaimer: Derivatives trading involves a substantial risk of loss and is not suitable for all investors. The information contained in this post is for informational purposes only and not financial advice.

Sources:

SQF FAQ: :https://www.cmegroup.com/articles/faqs/faq-spot-quoted-futures.html

SQF Intro: https://www.cmegroup.com/articles/2025/futures-get-a-fresh-look-an-introduction-to-spot-quoted-futures.html

SQF Fact Card: https://www.cmegroup.com/markets/equities/files/spot-quoted-futures-fact-card.pdf

SQF SER: https://www.cmegroup.com/notices/ser/2025/05/ser-9506r.html

~ Max Hessling, Broker