Where are futures contracts traded

Three major futures exchanges in the U.S. account for the majority of domestic trading.  They are:

1. Chicago Board of Trade (CBOT).  Markets include U. S. Treasury bonds, Grains and Soybeans.

2. Chicago Mercantile Exchange (CME).  Markets include Eurodollars, S&P 500, Currencies, and Meat.

3. New York Mercantile Exchange (NYMEX).  Markets include Energy, Precious Metals and Copper.

In addition several major exchanges in Europe and the Far East offer actively traded markets open to U.S. investors. 

Similar to stock exchanges, futures exchanges have a fixed number of memberships and membership is required to trade on the exchange.  Non-members are required to place orders through the exchange member firms.  The exchanges regulate contract terms and trading activity.  One of their important roles is the regulation of margin requirements that are required for each contract held.  In addition each exchange maintains a clearinghouse through which all orders are settled.  The clearinghouse provides a financial umbrella to protect customers and members against the failure of any individual member.  The exchanges in turn are regulated by the Commodity Futures Trading Commission.

Most trading takes place by an open outcry system in what is referred to as the pit.  The pit is a physical location on the exchange floor which is assigned to a particular futures market.  All members trading this market either for customers or their own accounts trade with other members in this area.  Each firm maintains order desks on the periphery of the trading floor to receive orders and send back trading confirmations.  In addition to the physical trading floor, most exchanges are now operating electronic trading systems either 24 hours a day or during hours when floor trading is closed.

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187 Danbury Road, P.O. Box 806,
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