As a hypothetical example, suppose Company A buys one contract of Nikkei 225 Futures at 40,000 yen, Company B buys Nikkei 225 mini at the same price, and both hold them to expiry. The contract size is index × 1,000 yen for Nikkei 225 Futures, index × 100 yen for Nikkei 225 mini, and index × 10 yen for Nikkei 225 Micro Futures. How many contracts of Nikkei 225 mini must B buy so that B's profit or loss at expiry is the same as A's, regardless of the special quotation (SQ value)?
Quiz: Listed Products
Last reviewed: October 15, 2026
This is a draft, shown for review before publication.
5 questions to check your understanding of the chapter “Listed Products”. Choose an answer and select “Check answer” to see the answer and explanation. You can also open “Answer and explanation” to see the answer first.
Question 1
Answer and explanation
Answer: B
The answer is 10 contracts. The profit or loss on equity index futures held to expiry is the difference between the SQ value and the traded price, multiplied by the contract size and the number of contracts. A 1-yen move in the index changes the result by 1,000 yen for one contract of Nikkei 225 Futures and by 100 yen for one contract of Nikkei 225 mini, so 10 contracts of Nikkei 225 mini give the same result as one contract of Nikkei 225 Futures. If the SQ value is 40,500 yen, A's result is (40,500 − 40,000) × 1,000 × 1, a profit of 500,000 yen. B's result is (40,500 − 40,000) × 100 × 10, the same profit of 500,000 yen. If the SQ value is 39,500 yen, both lose 500,000 yen.
You would choose 1 contract if you think that futures on the same index give the same result per contract. Nikkei 225 Futures and Nikkei 225 mini are both futures on the Nikkei Stock Average, but their contract sizes differ. For the same price move, the profit or loss on one contract of Nikkei 225 Futures is 10 times that on one contract of Nikkei 225 mini. You get 100 contracts if you misread the contract size of Nikkei 225 mini as the index × 10 yen of Nikkei 225 Micro Futures. With a contract size of index × 10 yen, it takes 100 contracts to match one contract of Nikkei 225 Futures.
Learn more: Equity Index Futures
Question 2
If other conditions such as the interest rate stay the same, how does a higher dividend yield on the index affect the theoretical price of equity index futures?
Answer and explanation
Answer: A
The theoretical price becomes lower. The theoretical price of equity index futures is the current index plus an amount for interest to expiry, minus an amount for the dividends received by expiry. The dividend amount is the index multiplied by the dividend yield and the time to expiry, and it corresponds to the dividends received from holding stocks that make up the index until expiry. A higher dividend yield means a larger amount is subtracted, so the theoretical price is lower. If the dividend amount is larger than the interest amount, the theoretical price is below the index.
If you think that more dividends also benefit the buyer of the futures, you would choose "It becomes higher." However, the dividend amount is subtracted from the index in the theoretical price formula. You would choose "It does not change" if you think dividends have nothing to do with the theoretical price. Along with the interest amount, dividends are one of the factors that set the theoretical price.
Learn more: Equity Index Futures
Question 3
As a hypothetical example, suppose the Nikkei Stock Average is at 40,000 yen and a person holds 40 million yen of stocks that rise and fall by the same percentage as it. This person buys one Nikkei 225 Options put with a strike price of 39,000 yen for a premium of 400 yen and holds it to expiry. Each 1 yen of premium is worth 1,000 yen per contract. Compared with holding the stocks alone, what happens to the profit or loss at expiry?
Answer and explanation
Answer: C
The loss from a fall is capped, and the gain from a rise is smaller by the 400,000-yen premium. Holding the stocks and buying a put on them is called a protective put. The stocks are worth 1,000 times the Nikkei Stock Average, so one contract matches them exactly. If the SQ value is 36,000 yen, the stocks lose 4 million yen and the put makes 2.6 million yen, a combined loss of 1.4 million yen. Below 39,000 yen, however far the SQ value falls, the combined loss stops at 1.4 million yen (the 1 million yen fall down to the strike price plus the 400,000-yen premium).
If you think the loss from a fall disappears, you would choose the first option. However, the put does not cover the fall from 40,000 yen to the strike price of 39,000 yen, and you also pay the premium. When the stocks rise, too, the gain is smaller than with the stocks alone by the 400,000-yen premium paid. If you think the gain from a rise is also capped, you would choose the second option. However, the put is not exercised when the SQ value is at or above the strike price, and all you lose is the premium paid. If the SQ value is 44,000 yen, the stocks gain 4 million yen, and subtracting the 400,000-yen premium gives a profit of 3.6 million yen.
Learn more: Equity Index Options
Question 4
As a hypothetical example, suppose a buyer purchases one unit of a call with a strike price of 2,000 yen on the shares of Company W, whose trading unit is 100 shares, and holds it to expiry. The share price at expiry is 2,500 yen, and the buyer does not give up the right. For a single stock option (securities option) on the Osaka Exchange, what happens when it is exercised?
Answer and explanation
Answer: B
The buyer pays the strike price of 2,000 yen per share, 200,000 yen in total, and buys 100 shares of Company W. When a single stock option is exercised, the buyer of a call buys the underlying shares at the strike price, and the seller who is assigned the exercise sells the same shares at the strike price. It settles by trading the shares themselves, not by paying a cash difference. The shares bought are worth 250,000 yen at the share price at expiry, so the buyer is left with a difference of 50,000 yen.
Receiving only the 50,000-yen difference is how equity index options such as Nikkei 225 Options settle: they pay the difference between the strike price and the SQ value. Buying at 2,500 yen per share is the choice you make if you misread the trade as taking place at the share price at expiry rather than the strike price. Buying at the strike price of 2,000 yen is the substance of a call.
Learn more: Single Stock Options
Question 5
What kind of security is a covered warrant?
Answer and explanation
Answer: D
A covered warrant is a warrant that a third party such as a securities firm issues on another company's shares. At expiry it settles by paying the difference between the strike price and the price of the underlying, and the underlying shares themselves are not delivered. The issuer pays the difference, so if the issuer cannot pay, the holder may not receive it.
A security that a company issues on its own shares and that delivers the company's shares when exercised is a share option. Even when it is listed on an exchange, payment on a covered warrant depends on the issuer's credit, and a clearing house does not guarantee the payment at expiry. A bond that can be exchanged for the issuing company's shares on set terms is a convertible bond.
Learn more: Warrants