Futures Exchanges

There are a number of futures exchanges in the United States and elsewhere, and more are being established. The Chicago Board of Trade (CBT) is among the largest. Other notable exchanges include the Chicago Mercantile Exchange (CME), the London International Financial Futures Exchange (LIFFE), and the New York Mercantile Exchange (NYME).

Table 23.1 gives a partial Wall Street Journal listing for selected futures contracts. Taking a look at the corn contracts in the upper left portion of the table, note that the contracts trade on the CBT, one contract calls for the delivery of 5,000 bushels of corn, and prices are quoted in cents per bushel. The months in which the contracts mature are given in the first column.

For the corn contract with a September 2001 maturity, the first number in the row is the opening price (219 cents per bushel), the next number is the high price for the day (219), and the following number is the low price for the day (217). The settlement price is the fourth number (218%), and it is essentially the closing price for the day. For purposes of marking-to-market, this is the figure used. The change (-%), listed next, is the movement in the settlement price since the previous trading session. The highest price (276/2) and lowest price (192) over the life of the contract are shown next. Finally, the open interest (17,020), the number of contracts outstanding at the end of the day, is shown. At the end of a section, the volume of trading in all maturities is shown for that day (57,000) and the previous day (67,959), along with the total open interest for all maturities (357,192) and the change in the total open interest (+1,467).

To see how large futures trading can be, we take a look at the CBT Treasury bond contracts (under the interest rate heading). One contract is for long-term Treasury bonds with a face, or par, value of $100,000. The total open interest for all months is about 550,000 contracts. The total face value outstanding is therefore $550 billion for this one type of contract!

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