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FUTURES FACTS

February 18, 2007 Reprints

Futures contracts are standardized, transferable contracts that are traded on an exchange and represent an agreement to buy or sell a commodity or financial instrument at a particular price on a stipulated future date. Options let buyers choose whether to exercise the option to buy or sell the commodity or instrument by the exercise date.

Trading in hurricane futures and options contracts at the Chicago Mercantile Exchange Inc. will be based on National Hurricane Center data on storm wind velocity and size.

Trading in property damage risk futures and options contracts at the New York Mercantile Exchange Inc. will be based on property losses from U.S. catastrophes.

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FUTURES FACTS

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