Editing Futures exchange (section)

{{Short description|Central financial exchange where people can trade standardized futures contracts}}
{{Financial markets}}
A '''futures exchange''' or '''futures market''' is a central [[financial exchange]] where people can trade standardized [[futures contract]]s defined by the exchange.<ref>{{cite book|title=Options, Futures, and Other Derivatives|page=2|publisher=Pearson|last=Hull|first=John C.|edition=9|year=2015}}</ref> Futures contracts are [[derivative (finance)|derivatives]] contracts to buy or sell specific quantities of a [[commodity]] or [[financial instrument]] at a specified price with [[Delivery (commerce)|delivery]] set at a specified time in the future. Futures exchanges provide physical or electronic trading venues, details of standardized contracts, market and price data, [[Clearing house (finance)|clearing houses]], exchange self-regulations, [[Margin (finance)|margin]] mechanisms, settlement procedures, delivery times, delivery procedures and other services to foster trading in futures contracts.<ref>{{cite book|title=Options, Futures, and Other Derivatives|pages=22–44|publisher=Pearson|last=Hull|first=John C.|edition=9|year=2015}}</ref>  Futures exchanges can be integrated under the same brand name or organization with other types of exchanges, such as [[stock market]]s, [[options market]]s, and [[bond market]]s.<ref>{{Cite web|url=https://www.cftc.gov/sites/default/files/opa/speeches00/opaericks-5.htm|title=Futures Exchange Demutualization: Remarks of Commissioner Thomas J. Erickson Commodity Futures Trading Commission|publisher=Commodity Futures Trading Commission|last=Erickson|first=Thomas J.|access-date=2020-05-08|archive-date=2022-04-08|archive-url=https://web.archive.org/web/20220408105210/https://www.cftc.gov/sites/default/files/opa/speeches00/opaericks-5.htm|url-status=live}}</ref> Futures exchanges can be organized as non-profit member-owned organizations or as for-profit organizations. Non-profit, member-owned futures exchanges benefit their members, who earn commissions and revenue acting as [[Broker|brokers]] or market makers; they are privately owned.  For-profit futures exchanges earn most of their revenue from trading and clearing fees, and are often [[public corporations]].<ref>{{Cite web|url=https://www.theifm.org/sites/default/files/inline-files/Product%20Innovation%20and%20Competition%20-pubJul2012.pdf|title=A Half-Century of Product Innovation and Competition at U.S. Futures Exchanges|publisher=The Institute for Financial Markets|last1=Gorham|first1=Michael|last2=Kundu|first2=Poulomi|access-date=2020-05-08|archive-date=2020-09-27|archive-url=https://web.archive.org/web/20200927031546/http://theifm.org/sites/default/files/inline-files/Product%20Innovation%20and%20Competition%20-pubJul2012.pdf|url-status=live}}</ref>