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Home / Education / Futures & Options 101 / Contracts Traded

Contracts Traded

Founded in 1898 as a not-for-profit corporation, in November 2000 CME became the first U.S. financial exchange to demutualize and become a shareholder-owned corporation.

CME has four major product areas: interest rates, stock indexes, foreign exchange and commodities. In 2000, more than 231 million contracts with an underlying value of $155 trillion changed hands at CME, representing the largest notional value traded on any futures exchange in the world.

Why are there new contracts?
Whenever a commodity is actively bought and sold in the cash market and there are enough people who could benefit from having a futures contract for that commodity, an exchange can decide to introduce a new futures contract.

Agricultural Commodity Futures

The first commodities traded at CME were agricultural products. Modern expansion of CME started in 1961 when Frozen Pork Bellies were introduced (an extremely innovative idea at the time), soon to be followed by Live Cattle and Live Hog futures, the first futures contracts on live animals. Today, there are also futures contracts for Feeder Cattle and Lean Hogs. The latest agricultural futures include contracts for Milk, Butter and Whey. Forest-related products currently include Oriented Strand Board and Random Length Lumber.

Foreign Exchange Futures

A number of foreign exchange futures are traded at CME. Currency futures are quoted as U.S. dollars against the currency. That tells you the number of dollars it takes to buy one unit of foreign currency. For example, dollars per Japanese yen, or dollars per British pound. There are also futures on the Euro FX (the pan-European currency), Australian dollar, Canadian dollar, French franc and Swiss franc. The latest foreign exchange futures added to CME are those from emerging nations such as the Mexican peso, Brazilian real, Russian ruble and South African rand.

How big are these contracts?
Here’s an example. One Euro FX futures contract is the equivalent of 125,000 Euro. A quote of .9200 means it costs 92 U.S. cents to buy one Euro. The total value of the contract would be 125,000 x .92 = 115,000

Interest Rate Futures

CME trades interest rate products like 13-week and one-year U.S. Treasury Bills. People can profit from trading interest rate futures by correctly predicting upward or downward interest rate changes.

CME also trades Eurodollars, which are U.S. dollars on deposit with banks outside the country. The futures contract reflects the offered interest rate for a 3-month $1 million deposit.

The #1 Traded Contract
CME’s Eurodollar contract tops the charts. In 1999, there were over 93 million Eurodollar contracts traded.

Other interest rate products include the Brady Bonds (Mexican Par, Argentine FRB, Brazilian C, and Brazilian EI Bonds), Federal Funds Rate, and LIBOR futures. LIBOR stands for London Interbank Offered Rate, an interest rate dealing in Eurodollars between commercial banks in the London Interbank Market. CME’s LIBOR contract is for a one-month $3 million deposit.

Index Futures

The fourth group of contracts traded at CME is the index group, and it includes futures and options on stock indexes as well as a major commodity index. In recent years, stock index futures have become very popular, highly traded contracts. In 1999, for example, the S&P 500 Stock Index futures contract was the second most-traded contract at CME, and the E-mini S&P 500 (the smaller, online version of the standard index contract) ranked third in trading volume. The actual S&P 500 Stock Index tracks the performance of 500 large companies, which represent about 80% of the value of all the stocks listed on the New York Stock Exchange. People invest in stock index contracts to protect stock investments, gain broader exposure to various equity markets, and to try to capitalize on the continuous movement that characterizes these indexes.

S&P 500 Contract Value
The S&P 500 futures contract is valued at 250 times the index price. $1200.00 x 250 = $300,000

Index Futures

  • S&P 500 Stock Index
  • S&P 500 MidCap 400 Stock Index
  • Nikkei 225 Stock Index
  • Goldman Sachs Commodity Index
  • Russell 2000 Stock Index
  • S&P 500/Barra Growth Index
  • S&P 500/Barra Value Index
  • Nasdaq-100 Index
  • E-mini Nasdaq-100
  • FORTUNE e-50
  • Mexico IPC Stock Index

As you can see from the great number and variety of contracts traded at CME, a lot has changed since 1898.

Additional Lessons

  • Futures Contract
  • Futures Exchange
  • Supply and Demand
  • Fundamental Analysis
  • Technical Analysis
  • Orders in the Pit
  • Trading Pit
  • Risk Management
  • Hedgers & Speculators
  • Options on Futures
  • Reading Quotes
  • GLOBEX
  • Hand Signals
  • Expiration Months

Contents Courtesy of CME Group.

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The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

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