A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange.[1] Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. Futures exchanges provide physical or electronic trading venues, details of standardized contracts, market and price data, clearing houses, exchange self-regulations, margin mechanisms, settlement procedures, delivery times, delivery procedures and other services to foster trading in futures contracts.[2] Futures exchanges can be integrated under the same brand name or organization with other types of exchanges, such as stock markets, options markets, and bond markets.[3] Futures exchanges can be organized as non-profit member-owned organizations or as for-profit organizations. Non-profit, member-owned futures exchanges benefit their members, who earn commissions and revenue acting as brokers or market makers; they are privately owned. For-profit futures exchanges earn most of their revenue from trading and clearing fees, and are often public corporations.[4]
- ^ Hull, John C. (2015). Options, Futures, and Other Derivatives (9 ed.). Pearson. p. 2.
- ^ Hull, John C. (2015). Options, Futures, and Other Derivatives (9 ed.). Pearson. pp. 22–44.
- ^ Erickson, Thomas J. "Futures Exchange Demutualization: Remarks of Commissioner Thomas J. Erickson Commodity Futures Trading Commission". Commodity Futures Trading Commission. Archived from the original on 2022-04-08. Retrieved 2020-05-08.
- ^ Gorham, Michael; Kundu, Poulomi. "A Half-Century of Product Innovation and Competition at U.S. Futures Exchanges" (PDF). The Institute for Financial Markets. Archived (PDF) from the original on 2020-09-27. Retrieved 2020-05-08.