Exchange-traded derivative contract

Exchange-traded derivative contracts are standardized derivative contracts (e.g. futures contracts and options) that are transacted on an organized futures exchange. They are standardized and require payment of an initial deposit or margin settled through a clearing house.

Naming convention

These contracts can include futures, call and put. Part of the name of these contracts always reflect on which date the contract expire. For example, a future ABC expiring in September 2006 will be called ABC U06. A call (C) option ABC expiring in September 2006 will be called ABC I06C. A put (P) option ABC expiring in September 2006 will be called ABC U06P. The future and option naming convention are defined by each exchange but typical expiration month codes used is shown in the table below.

Expiration month codes

References

• Clearing and Settlement of Exchange-Traded Derivatives by John McPartland (Federal Reserve Bank of Chicago)
• Understanding Derivatives: Markets and Infrastructure Federal Reserve Bank of Chicago, Financial Markets Group