Thursday, September 3, 2009

securities used in financial future contracts

The number of futures markets and types of securities and contracts traded in those markets have been expanding rapidly in recent years. In 1975 only one type of contract was traded at the Chicago Board of Trade. In 1981 25 different futures contracts were being traded on several different exchanges. however, most trading in financial futures today centers around five types of securities:(1)U.S. Treasury bills,(2)Treasury bonds and notes, (3)GNMA mortgage pass-through (or mortgage-backed) securities, (4)prime-quality commercial paper, and (5)bank certificates of deposit (CDs). The Chicago Board of trade first offered interest-rate futures contracts for GNMA mortgage instruments in October 1975.Soon. Other commodities exchanges-the international monetary market of the Chicago Mercantile exchange (IMM), The Amex Commodities Exchange, Inc. (ACE), and the Commodity Exchange, Inc. (Comex)-began offering futures trading in T-bills and GNMA certificates. Then, in August 1980 the New York Stock Exchange opened its own futures floor. Known as the New York Futures Exchange, it has began to capture a larger share of the contract market, especially for traders in bank CDs.
Each of these exchanges completely controls which security contracts may be offered for sale, acceptable delivery dates, delivery methods, posting of prices, contract par values, and other essential terms of trade.

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