Eligible Contract Participant


DEFINITION of 'Eligible Contract Participant'

A group or individual allowed to engage in financial transactions not open to retail customers. The Commodity Exchange Act outlines the requirements for eligibility, stating that those seeking to become eligible contract participants must have sufficient regulated status or a specified amount of assets.

BREAKING DOWN 'Eligible Contract Participant'

Eligible contract participants include financial institutions, insurance companies, commodity pools and wealthy individuals. These participants are authorized to engage in complex stock or futures transactions such as block trades, exchanging excluded commodities and transacting on a derivatives transaction execution facility. Becoming an eligible contract participant provides a person or group with a wider range of investment choices and financial options than would be available to a standard investor.

  1. Commodity Exchange Act - CEA

    An act passed in 1936 by the U.S. Government that provides federal ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  3. Derivatives Transaction Execution ...

    A market that supports the transaction of derivatives on which ...
  4. Commodity Futures Trading Commission ...

    An independent U.S. federal agency established by the Commodity ...
  5. Block Trade

    An order or trade submitted for sale or purchase of a large quantity ...
  6. Put-Call Parity

    A principle that defines the relationship between the price of ...
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