An Introduction to Trading Futures

E-mini Dow ($5), DJIA ($10) and Big Dow DJIA ($25) contracts offer flexible opportunities to trade the large-cap U.S. Equity market. These index contracts are now available on CME Globex a robust electronic trading platform delivering fast, efficient and anonymous trading. This fact card will give you a quick snapshot of who uses these contracts and why, plus the contract specifications you need to know to begin trading.

This brochure provides an in-depth description of the exercise and assignment process for options on futures that trade on CME Group-designated contract markets:

• Chicago Board of Trade (CBOT)
• Chicago Mercantile Exchange (CME)
• Commodity Exchange (COMEX)
• New York Mercantile Exchange (NYMEX)

Options on Futures: The Exercise and Assignment Process

Copper is widely considered as one of the key cyclical commodities, given its extensive usage in construction, infrastructure and an array of equipment manufacturing. The biggest end-use is for the production of cables, wiring and electrical goods because of its excellent electricity conducting properties. The construction sector is the second largest user of copper, for plumbing, HVAC and building wiring applications.

Although found in abundance and widely extracted as well as recycled, the copper value chain is quite capital intensive. This makes the market susceptible to supply-side constraints, and therefore, volatile price fluctuations.

Coppers importance in world markets and responsiveness to global economic events make our high-grade COMEX copper futures and options contracts important risk management tools for commercial interests, as well as a potentially rewarding opportunity for investors who wish to participate in this market.

Copper Futures and Options

Grain and Oilseed Futures and Options

Grains and Oilseeds are renewable resources with continuously fluctuating global supplies, largely determined by crop production cycles, weather and ongoing shifts in global market demand. CME Group Grain and Oilseed futures and options serve commodity producers, end users and trading intermediaries seeking price risk management and price discovery tools. In addition, these tools provide liquidity generating traders and investors with a vehicle to capitalize on the extraordinary opportunities these markets offer. The Grain and Oilseed Futures and Options fact card discusses the features and benefits of Corn, Chicago Soft Red Winter (SRW) Wheat, KC Hard Red Winter (HRW) Wheat, Soybeans, Soybean Meal, Soybean Oil, Rough Rice and Oat futures, and also provides contract specifications.

CME Group Options on Futures Guide

The Basic Fundamentals, Strategy and Vocabulary of our Options Markets

CME Group’s vast and liquid family of option contracts on futures can help you diversify your portfolio while helping to mitigate your downside risk. This introductory guide will walk you through the basic fundamentals, strategy and vocabulary of our options markets, providing a solid base of knowledge that will make you well-prepared to tackle these opportunities.

Options are available across all major asset classes, including on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. Our introductory guide includes a listing of the most active options contracts traded on futures at CME Group. This listing is not exhaustive of all options products, but is a good representation of the types of options that CME Group offers.

In addition, our Options on Futures Guide covers everything you need to understand and utilize these contracts:

• Vocabulary The basic vocabulary of options on futures

• Pricing Fundamentals — How options premiums (or prices) are determined

• Arithmetic The basic calculations you need to understand; complex mathematics are not required

• Important Concepts Concise definitions of In-the-money, At-the-money, Out-of-the-money, Time Decay Value, Delta and Performance Bond

• Basic Strategies Examples of the dozens of options strategies possible given the flexibility of options

• Review Questions Questions to test your understanding of options

Dow Jones Industrial Average Futures and Options

Real Time Simulated Futures Trading

Learn to trade like a pro by doing what the pros do: trading on a professional platform, but in a live simulated environment. When you are ready to try your hand at placing trade orders, simply register for one week of free access to our simulation platform. You will be able to trade 24/7, around the clock whenever our markets are available. Real-Time Simulated Trading.