Guide to futures exchanges (futures markets)


A futures exchange or futures market is a stock exchange whose transactions are conducted only in the future.

This in contrast to the spot market, where the fulfillment of the concluded contract takes place immediately, ie at least within two days .

The largest and most well -known futures exchanges are the German -Swiss Eurex, the Chicago Mercantile Exchange (CME), Chicago Board of Trade (CBOT) and the London International Financial Futures Exchange (LIFFE).

Among other major futures exchanges (only eight in the U.S.) also exist in many countries, many futures exchanges have regional importance.

Purpose of an exchange is the temporal and spatial (or, more recently, virtual ) concentration of trade and thus increasing the efficiency and market liquidity, reducing transaction costs and protection against tampering.

In addition, the disclosure of market activity causes a significant reduction in the costs of information .

The futures contracts traded on the futures exchanges are :

  •     Chicago Mercantile Exchange (CME ) Euro Dollar , S & P 500 futures currency ( euro , yen , Swiss franc, pound sterling )
  •     Chicago Board of Trade ( CBOT) : U.S. Treasury Bonds / Notes
  •     Eurex futures and options on stocks , stock indices and bonds
  •     London International Financial Futures Exchange ( Euronext.LIFFE ) : Euribor 3M Sterling, Long Gilt , Financial Times Index
  •     Marché à Terme International de France ( MATIF ) , Euro Next
  •     Singapore Exchange    EEX : electricity, CO2 emissions , coal, gas

Market Overview – The world’s largest derivatives exchanges

The world’s largest derivatives exchanges by turnover ( EUR per year ) are:

  •     CME Group – 3.28 billion
  •     Eurex (including ISE) – 3.17 billion
  •     Korea Exchange – 2.87 billion
  •     NYSE Euro Next – 1.68 billion
  •     CBOE (including CFE) – 1.19 billion

The Jensen – alpha has a special significance in determining the performance of securities.

In the context of stock option plans for senior executives , as part of a performance-based payment, the option conditions should be chosen so that the options may be exercised only with a positive alpha factor.



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