The Chicago Mercantile Exchange (CME)
Group, one of the world’s largest derivatives marketplaces, on Monday launched
event contracts for retail investors to trade global benchmark products.
The Group previously announced the planned
launch of the event contracts in June.
CME Group’s event contracts give individual investors
the ability to trade on end-of-day price movements of key futures markets
such as natural resources, currencies and indexes, CME Group said.
Each event contract is capped at $20 per
contract, the derivatives marketplace organizer said, adding that investors
will be able to determine their maximum profit or loss when entering a trade.
Tim McCourt, Global Head of Equity and FX
Products at CME Group, noted that the exchange’s event contracts will provide
investors with “innovative, lower-cost ways to trade across oil, gold, equity
indices and foreign currencies.”
The contracts cover various futures
markets index-based benchmark products such as the E-mini Dow Jones Industrial Average, E-mini Russell 2000,
E-mini S&P 500.
“We continue to see increasing demand
from retail investors looking for less-complex ways to gain exposure to and
participate in CME Group benchmark products – some of the world’s most widely
quoted futures markets,” McCourt noted.
In the statement announcing the launch, Interactive Brokers,
CQG, NinjaTrader, Dorman Trading, and Ironbeam stated that they will be
onboarding CME Group’s event contracts on their trading platforms.
“Interactive Brokers is excited to
launch event contracts and to offer our clients the ability to trade their
opinion on yes-or-no questions,” said Steve Sanders, Interactive Brokers’
Executive Vice President of Marketing and Product Development.
Are Binary Options Back?
CME Group’s event contracts are binary options-styled contracts. A binary option enables a trader to get a payout by predicting if the price of an asset will rise or fall.
It typicall pays a fixed amount or nothing at all, depending on whether the trader wins or loses the prediction.
However, binary option is a controversial financial instrument that has been banned in several jurisdications including in the United Kingdom, European Union (EU), Canada, Australia, and Israel.
Nonetheless, the United States, which has one of the strictest regulated
financial markets, permits binary options contracts in a highly regulated environment.
This is contrary to that the fact that the US forbids the trading of contracts for difference (CFD) which is permitted in the UK and across Europe.
In June, a CME Group spokesperson told Finance Magnates that the event contracts the company was planning to launch in the United States are not the same as the CFDs and binary options that have been banned in the UK and EU .
“While CFDs and binary options in the UK and Europe settle to prices
determined by their brokers, CME Group event contracts will settle
based on a regulated futures market with transparent prices,” the spokesperson said.
The Chicago Mercantile Exchange (CME)
Group, one of the world’s largest derivatives marketplaces, on Monday launched
event contracts for retail investors to trade global benchmark products.
The Group previously announced the planned
launch of the event contracts in June.
CME Group’s event contracts give individual investors
the ability to trade on end-of-day price movements of key futures markets
such as natural resources, currencies and indexes, CME Group said.
Each event contract is capped at $20 per
contract, the derivatives marketplace organizer said, adding that investors
will be able to determine their maximum profit or loss when entering a trade.
Tim McCourt, Global Head of Equity and FX
Products at CME Group, noted that the exchange’s event contracts will provide
investors with “innovative, lower-cost ways to trade across oil, gold, equity
indices and foreign currencies.”
The contracts cover various futures
markets index-based benchmark products such as the E-mini Dow Jones Industrial Average, E-mini Russell 2000,
E-mini S&P 500.
“We continue to see increasing demand
from retail investors looking for less-complex ways to gain exposure to and
participate in CME Group benchmark products – some of the world’s most widely
quoted futures markets,” McCourt noted.
In the statement announcing the launch, Interactive Brokers,
CQG, NinjaTrader, Dorman Trading, and Ironbeam stated that they will be
onboarding CME Group’s event contracts on their trading platforms.
“Interactive Brokers is excited to
launch event contracts and to offer our clients the ability to trade their
opinion on yes-or-no questions,” said Steve Sanders, Interactive Brokers’
Executive Vice President of Marketing and Product Development.
Are Binary Options Back?
CME Group’s event contracts are binary options-styled contracts. A binary option enables a trader to get a payout by predicting if the price of an asset will rise or fall.
It typicall pays a fixed amount or nothing at all, depending on whether the trader wins or loses the prediction.
However, binary option is a controversial financial instrument that has been banned in several jurisdications including in the United Kingdom, European Union (EU), Canada, Australia, and Israel.
Nonetheless, the United States, which has one of the strictest regulated
financial markets, permits binary options contracts in a highly regulated environment.
This is contrary to that the fact that the US forbids the trading of contracts for difference (CFD) which is permitted in the UK and across Europe.
In June, a CME Group spokesperson told Finance Magnates that the event contracts the company was planning to launch in the United States are not the same as the CFDs and binary options that have been banned in the UK and EU .
“While CFDs and binary options in the UK and Europe settle to prices
determined by their brokers, CME Group event contracts will settle
based on a regulated futures market with transparent prices,” the spokesperson said.