General Theory - Types And Exchanges

Today, though, there are still only six widely traded types of futures. They are, ranked by annual contract volume:

  1. Interest rates,
  2. Petroleum products,
  3. Stock indices,
  4. Currencies,
  5. Metals and
  6. Agricultural products.

The important exchanges, along with their main products, are:

Exchange
Classification
Products
Chicago Board of Trade (part of the CME)
Agricultural
Corn, soybean, soybean oil, soybean meal, wheat, oats, ethanol, rough rice

Interest rate
30-year Treasury bonds, 10-year T-notes, 5-year T-notes, 2-year T-notes, 10-year swaps, 5-year swaps, 30-day Fed Funds

Index
Dow, Dow AIG Index

Metal
Gold, silver
Chicago Mercantile Exchange (CME)
Index
S&P 500, Nasdaq

Interest rate
Eurodollar, Euroyen, swaps

Currency
Dollar-denominated, euro-denominated

Agricultural
Dairy, cattle, pork, lumber, fertilizer

Alternatives
Weather, housing
New York Mercantile Exchange (NYM, part of the CME)
Petroleum
Crude oil, natural gas, gasoline, heating oil

Metal
Gold, silver, copper
NYSE Liffe
Misc.
$/¬, Rapeseed, Robusta coffee
Kansas City Board of Trade
Agricultural
Wheat

Index
Value Line
Minneapolis Grain Exchange
Agricultural
Wheat, corn, soybean
New York Board of Trade
Agricultural
Cocoa, coffee, cotton, ethanol, orange juice, wood pulp, sugar,

Currency
Dollar-denominated, euro-denominated, cross-currency

Index
Russell indices, NYSE Composite, commodities indices, Dollar index

The Chicago Board Options Exchange initiated a subsidiary called the CBOE Futures Exchange (CFE) in 2004. In addition, the Philadelphia Stock Exchange is, as of this writing, preparing to launch a futures bourse to be known as the Philadelphia Board of Trade. This venue is presently better known for trading options and funds.

Internationally, Euronext.liffe trades interest rate futures in London. Two other U.K.-based bourses, the London Metal Exchange and the London Commodity Exchange, trade precious metals and agricultural products, respectively. Petroleum futures markets are made at the ICE Futures Exchange which, although headquartered in Atlanta, is regulated under British auspices and has offices worldwide. The Tokyo Commodity Exchange is also active in a broad range of markets. Exchanges in India, South Africa and Hungary are among the fastest growing.

Even so, almost half the world's futures volume is still traded in the U.S. CME, alone, accounts for one-third of world volume in futures contracts.

The Futures Contract
Related Articles
  1. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  2. Chart Advisor

    Traders Step Back to Assess Commodities Damage

    Traders are turning to these exchange-traded notes and exchange-traded funds to analyze key commodities and determine what could be coming next.
  3. Credit & Loans

    Four Ways to Improve Education In America

    U.S. students place 27th in math and 20th in science out of 34 countries. The United States must reform its education system or harm future economic productivity and global trade competitiveness.
  4. Investing News

    Oil or Gold: Which Will Recover First?

    Not sure where oil and gold are headed? The answer is complex.
  5. Investing Basics

    Explaining Forward Rate Agreements

    Forward rate agreement (FRA) refers to an interest rate or foreign exchange hedging strategy.
  6. Investing

    Using Fibonacci to Analyze Gold

    Use Fibonacci studies to analyze gold by picking out hidden harmonic levels that can provide major support or resistance.
  7. Options & Futures

    An Introduction To Value at Risk (VAR)

    Volatility is not the only way to measure risk. Learn about the "new science of risk management".
  8. Mutual Funds & ETFs

    ETF Analysis: United States Natural Gas Fund LP

    Find out more about the United States Natural Gas exchange-traded fund, the characteristics of the ETF and the suitability and recommendations of it.
  9. Mutual Funds & ETFs

    ETF Analysis: United States Oil Fund

    Find out more about the United States Oil Fund, the characteristics of USO, and the suitability and recommendations of the ETF for investors.
  10. Investing

    Why High Yield Still Has A Role To Play

    An asset class of this bull market has been high yield debt, as many searching for income in a low-rate world have turned to these higher-yielding bonds.
RELATED TERMS
  1. Derivative

    A security with a price that is dependent upon or derived from ...
  2. Series 6

    A securities license entitling the holder to register as a limited ...
  3. Inverse Transaction

    A transaction that can cancel out a forward contract that has ...
  4. Best To Deliver

    The security that is delivered by the short position holder in ...
  5. Exchange Traded Derivative

    A financial instrument whose value is based on the value of another ...
  6. Advanced Diploma In Insurance

    A qualification earned by insurance professionals and conferred ...
RELATED FAQS
  1. Can I use my IRA to pay for my college loans?

    If you are older than 59.5 and have been contributing to your IRA for more than five years, you may withdraw funds to pay ... Read Full Answer >>
  2. Can I use my 401(k) to pay for my college loans?

    If you are over 59.5, or separate from your plan-sponsoring employer after age 55, you are free to use your 401(k) to pay ... Read Full Answer >>
  3. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  4. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  5. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  6. What are the main risks associated with trading derivatives?

    The primary risks associated with trading derivatives are market, counterparty, liquidity and interconnection risks. Derivatives ... Read Full Answer >>
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!