1. Types of futures contract
PGDM 2010-2012
ITM BUSINESS SCHOOL

2. TYPES OF FUTURES
CONTRACT
Futures contracts can be broadly
classified into 2 categories
 Commodities futures
 Financial futures

3. Commodity futures
 Metals
Major metals traded with futures contracts include
copper, gold, platinum, palladium and silver, which are
listed on the New York Mercantile Exchange which
has merged with the Chicago Mercantile Exchange.
 Energy
The most popular energy futures contracts are crude
oil, crude palm oil, heating oil and natural gas. They
have become an important indicator of world
economic and political developments and are very
much influenced by producing nations such as
Malaysia.

4. Commodity futures
 Grains & Oil Seeds
Grains such as soybeans and oil seeds are essential to
food and feed supplies, and prices are sensitive to the
weather conditions, and also to economic conditions that
affect demand. Because corn is integral to the increasing
popularity of ethanol fuel, the grain markets also are
affected by the energy markets and the demand for fuel.
 Livestock
Commodity futures on live cattle, feeder cattle, lean hogs
and pork bellies are commodities traded at CME Group Inc
and prices are affected by consumer demand, competing
protein sources, price of feed, and factors that influence
the number of animals born and sent to market, such as
disease and weather.

5. Commodity futures
 Food and Fiber
The food and fiber category for futures trading
includes cocoa, coffee, cotton and sugar. In
addition to consumer demand globally, factors
such as disease, insect's infestation and drought
affect prices of these commodities.

6. Financial futures
 Eurodollar Futures
Eurodollar futures are U.S. dollars that are
deposited outside the country in commercial
banks mainly in Europe which are known to settle
international transactions. They are not
guaranteed by any government but only by the
obligation of the bank that is holding them.
 U.S. Treasury Futures
Because U.S. Dollars is the reserved currency for
most countries, the stability of the dollars allows
for treasury futures market and instruments such
as treasury bonds and treasury bills.

7. TYPES OF FINANCIAL
FUTURES
 Foreign Government Debt Futures
Most government issue debt that are
corresponded to the futures markets that are
listed around the world.
 Swap Futures
This is generally agreements that are between
two parties to exchange periodic interest
payments or
 Forex Futures
This type of futures is to manage the risks and
take advantage of related forex exchange rate
fluctuations.

8. TYPES OF FINANCIAL
FUTURES
 Single Stock Futures
 Most popular futures contracts are related to the
equity markets, they are also known as security
futures.
 Index Futures
 Futures that are based on the stock index.