Look-Alike Contracts


DEFINITION of 'Look-Alike Contracts'

A financial product, such as a swap or an option, that is traded over-the-counter and that is cash settled, based on the settlement price of a similar, exchange-traded futures contract, on a specific trading day. Futures look-alike contracts are regulated by the Commodity Futures Trading Commission (CFTC).

BREAKING DOWN 'Look-Alike Contracts'

A NYMEX look-alike, for example, is a look-alike option or look-alike swap, based on a futures contract that is traded on the New York Mercantile Exchange (NYMEX). The contract terms of a look-alike contract, closely correspond with the contract terms of the futures contract. Look-alike contracts are available on a variety of contracts including oil, coal, crude oil, natural gas, Brent (a major classification of crude oil) and WTI (West Texas intermediate, also known as Texas light sweet, a type of crude oil).

  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  3. Cash Settlement

    A settlement method used in certain future and option contracts ...
  4. West Texas Intermediate - WTI

    Light, sweet crude oil commonly referred to as "oil" in the Western ...
  5. New York Mercantile Exchange - ...

    The world's largest physical commodity futures exchange. Trading ...
  6. Futures Contract

    A contractual agreement, generally made on the trading floor ...
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