Chicago Mercantile Exchange - CME


DEFINITION of 'Chicago Mercantile Exchange - CME'

The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and a small amount on agricultural products.

BREAKING DOWN 'Chicago Mercantile Exchange - CME'

Founded in 1898 as a not-for-profit corporation, the CME was called the Chicago Butter and Egg Board until 1919. In November 2000, CME became the first U.S. financial exchange to demutualize and become a shareholder-owned corporation.

The trading of futures and options on futures provides a way to protect against and profit from price changes in financial instruments and physical commodities.

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  1. What is the default risk of a derivative?

    The default risk for a derivative is the risk that a counterparty to a financial derivative contract will default on its ... Read Full Answer >>
  2. How is fair value calculated in the futures market?

    The fair value is the theoretical calculation of how a futures stock index contract should be valued considering the current ... Read Full Answer >>
  3. What are the most popular assets for investors?

    Popular asset classes for investors includes savings accounts and bonds, marketable bonds, certificates of deposit, equity-based ... Read Full Answer >>
  4. Who sets the price of commodities?

    Commodities are extremely important as they are essential factors in the production of other goods. A wide of array of commodities ... Read Full Answer >>
  5. Do hedge funds invest in commodities?

    There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
  6. How do hedge funds use equity options?

    With the growth in the size and number of hedge funds over the past decade, the interest in how these funds go about generating ... Read Full Answer >>

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