Are You Trading Or Considering Trading Limited-Risk Contracts? Consider The New And Improved CME Event Contracts

March 20, 2024 at 08:45 AM EDT

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By Meg Flippin, Benzinga

Interested in having your voice heard about where a particular index is heading for the day? Then check out CME event contracts through EdgeClear.

Will the S&P 500 trade up or down today? What about the price of gold? Expect it to close higher by the end of the trading session, or think the Nasdaq will end the year lower than where it started? If you are considering trading limited-risk contracts, there’s a new way to do it thanks to the launch of the overhauled CME event contracts.

Event contracts offered by CME Group, the Chicago company that operates financial derivatives exchanges including the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange and the Commodity Exchange, provide investors with a straightforward way to invest in some of the leading futures markets around the world.

Through these event contracts, investors can predict and trade on whether the price of futures markets will settle above or below a selected price. Not only do event contracts from CME give investors an easy way to play the futures markets, but they can be held for different periods and are easy to exit. Currently, events contracts have daily, quarterly and yearly expirations, depending on which product you are investing in. The contracts expire at the settlement time of each market, but investors can exit their positions at any time before the market closes.

EdgeClear’s Edge

Investors can choose CME event contracts for the S&P 500, Nasdaq-100, Russell 2000, Dow Jones Industrial Average, WTI crude oil, natural gas, gold, silver, copper and EUR/USD. These event contracts are only available through a select group of brokerages including EdgeClear, the trading firm that has made a name for itself thanks to its knowledgeable and highly motivated team that has years of technical and practical trading experience. With EdgeClear, the company says you get practical investing solutions that are not only innovative but cost-effective. Getting information and access to CME event contracts is made easy at EdgeClear. Clients can either get the details from their personal EdgeClear broker or fill out an information request form and a personal broker will be assigned to them.

See how easy it is to trade CME event contracts with EdgeClear here.

CME Overhauls Its Event Contracts

In late January, CME launched event contracts with quarter and year-end expirations for E-mini S&P 500 and E-mini Nasdaq-100 futures, expanding its offering, which EdgeClear is now giving its customers access to. “Event contracts on E-mini S&P 500 and E-mini Nasdaq-100 futures are among the most highly traded of our event product suite, representing 33% and 20% of the volume, respectively,” said Tim McCourt, Global Head of Financial and OTC Products at CME Group, when announcing the improved offering. “These new contracts featuring longer expiries at quarter- and year-end will give traders a way to express their views on market direction at key economic-cycle intervals—with the added benefit of more opportunities to trade in and out of a position leading up to expiry. We’re pleased that our expanded suite of event contracts will continue to provide innovative, lower-cost tools for participating in CME Group's futures markets.”

With CME’s event contract overhaul the maximum payout for event contracts is $100.

How Event Contracts Work

Here’s a brief summary of how it works – investors choose an event contract in stock indexes, energy, metals or foreign currencies. Investors then select yes or no based on their view of whether the event will happen. The price you pay per contract is the most you can lose or earn per trade, excluding any fees and commissions. The potential profit of a trade ranges from $1 to $100. Let’s say you believe the price of gold will settle above $2,100 for the day. You select at that contract price, and based on the current market the trade costs you $51 plus fees. If gold ends up over $2,100, you receive $100, making a $49 profit on your trade less fees.

CME event contracts give investors an easy way to test their views on the global market’s daily, quarterly and yearly settlements. Through these contracts, investors have a way to express their opinions on the markets and potentially make money along the way while clearly defining their risk. Are you intrigued yet? Click here to learn more about how you can trade CME event contracts with EdgeClear.

Featured photo by m. on Unsplash.

A forward-thinking futures broker. Led by industry experts who understand the complexities of trading, Edge Clear combines the best of technology, service and risk control.

This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice.