Futures exchange

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Related to Futures markets: Futures trading

Futures Exchange

An exchange on which futures contracts are traded. A futures contract is traded on a futures exchange; this allows them to be standardized contracts, which reduces uncertainty for investors. Futures exchanges are useful because it allows investors to make either speculative investments or hedges based on the expected future price for a commodity or other underlying asset. Many futures exchanges are also options exchanges.

Futures exchange.

Traditionally, futures contracts and options on those contracts have been bought and sold on a futures exchange, or trading floor, in a defined physical space.

In the United States, for example, there are futures exchanges in Chicago, Kansas City, Minneapolis, and New York.

As electronic trading of these products expands, however, buying and selling doesn't always occur on the floor of an exchange. So the term is also used to describe the activity of trading futures contacts.

References in periodicals archive ?
The federal court order has effectively prohibited the two defendants from trading on the futures markets.
The cut-off point is November 1, 1999, when the local authority allowed the opening up of Taiwan futures markets to the foreign investors (QFIIs).
However, financial traders such as hedge funds and commodity index traders also face their own need to control risk and may have to reduce risk exposure in commodity futures markets when their risk-bearing capacity falls as a result of reasons outside of commodity markets.
Following Stoll and Whaley (1990), the following Multiple Regression (Simultaneous I equation modelling, two stage least square) is estimated to-examine the nature of lead-lag relationship between returns in the spot and the futures markets as presented below.
Commodity Futures Trading Commission Chairman Gary Gensler said on Thursday his exchange was examining cross-market linkages in its flash crash probe, as well as the way sharp movements in cash equities markets currently trip breakers in the futures markets.
Although this paper is not enough to show all opportunities of hedging and futures markets, it points out an idea how hedging works as a method of changing textile organization's risk management.
Several studies report that futures markets lead spot (cash) markets from a few seconds to hours (Kawaller, Koch, and Koch 1987; Stoll and Whaley 1990).
Transactions cost advantages, however, would favor futures markets as the optimal venue for conveying information of informed traders/speculators.
Coverage focuses on "events that impact the futures markets," Dow Jones said, and includes reviews of activity in such CBOT markets as corn, ethanol, soybeans, wheat and metals.
Asay, 1983, "A Note on the Design of Commodity Option Contracts--A Reply", Journal of Futures Markets, 3:335-338
Futures markets can affect spot markets by allowing producers to hedge, providing liquidity to holders of the commodity, providing information about the future price, and facilitating coordination of producers' decisions about future production.