STUDENT A N I N T RO D U C T I O N TO
MANUAL FUTURES & OPTIONS
» STUDENT MANUAL
Copyright 2003
Chicago Mercantile Exchange
Education Department
E-mail: [email protected]
www.cme.com
An Introduction to Futures and Options has been prepared by Chicago Mercantile
Exchange’s Education Department. We hope that this manual will broaden any
knowledge you may already have about futures and options or spark an interest
in this industry if you have not come into contact with it before now. We also offer a
number of other courses, both online and in classrooms, related to the futures
industry. Please check our course catalog, available in print from our office and online
at www.cme.com. If you have any questions, please contact CME’s Education
Department in Chicago at (312) 930-6937 or by dialing 1-800-331-3332.
With special acknowledgement to Larry Schneider, Executive Director
(Futures) at Morgan Stanley, former CME member, and an instructor in CME’s
Education Department for more than 25 years, and to the interns from DePaul
University, for their invaluable assistance in the updating of this text.
The information within this manual has been compiled by Chicago Mercantile Exchange (CME) for general
information purposes only. Although every attempt has been made to ensure the accuracy of the information,
CME assumes no responsibility for any errors or omissions. Additionally, all examples in this manual are
hypothetical fact situations, used for explanation purposes only, and should not be considered investment
advice. All matters pertaining to the rules and specifications herein are made subject to and are superseded by
official CME rules. Current CME rules should be consulted in all cases concerning contract specifications.
This manual is published by CME’s Education Department for the purpose of educating exchange members,
floor clerks, employees and students enrolled in CME-sponsored classes. Reproduction of this manual for any
purpose without the permission of the Education Department is strictly prohibited.
The Globe Logo, CHICAGO MERCANTILE EXCHANGE®, CME®, GLOBEX®, CLEARING 21®,
E-mini , E-quotes , CME$INDEX , E-px , GLOBEX Trader , and iLink are trademarks of Chicago
TM TM TM TM SM SM
Mercantile Exchange Inc. (CME), registered in the U.S. Patent and Trademark Office. All other trademarks
are the property of their respective owners.
12/03
Chicago Mercantile Exchange
TABLE OF CONTENTS
» CHAPTER 1
THE BIRTH OF FUTURES
» CHAPTER 2
THE FUTURES MARKETS
» CHAPTER 3
TRADING VENUES: OPEN OUTCRY
& ELECTRONIC TRADE MATCHING
» CHAPTER 4
TERMINOLOGY AND ORDER TYPES
» CHAPTER 5
HEDGING AND SPECULATING
» CHAPTER 6
ARBITRAGE
» CHAPTER 7
SPREADING
» CHAPTER 8
FUNDAMENTAL AND TECHNICAL ANALYSIS
» CHAPTER 9
FUTURES AND EXCHANGE-TRADED OPTIONS
ON FUTURES
» CHAPTER 10
FOLLOWING FUTURES AND OPTIONS PRICES
» APPENDIX
GLOSSARY
THE ART OF HAND SIGNALS
» ANSWER KEY FOR QUIZZES
Chicago Mercantile Exchange
