CM group

COURSE : INTERNATIONAL FINANCIAL MARKETS

PAPER :

28 July 2014

Sarfaraz Khan

Giulia

1: INTRODUCTION………………………………………………………………………………………………………………………2

2: CME GROUP , AN OVERVIEW………………………………………………………………………………………………….3

3: FUTURES AND OPTIONS…………………………………………………………………………………………………………3

4: ENERGY PRODUCTS..……………………………………………………………………………………………………………..4

5: NATURAL GAS FUTURE CONTRACT…………………………………………………………………………………………5

6: CRUDE OIL OPTION CONTRACT………………………………………………………………………………………………8

7: BIOBLIOGRAFY AND WEB SITES…………………………………………………………………………………………….11

1, INTRODUCTION:

In a world of increasing volatility, futures and options are the prime source for managing risk. CME Group Energy markets bring together a large and diverse community of market participants. Buyers and sellers trying to protect themselves from price and volatility risk.

The extensive slate of energy futures and options contracts listed at CME Group enable a global community of buyers and sellers to manage their exposure to energy market fluctuations and reducing their risk virtually 24 hours a day, with more than 1.25 million contracts traded daily. CME Group provides products for the entire energy spectrum - crude oil, natural gas, heating oil, gasoline, electricity, ethanol and more.

English: The Price Futures Group, Inc.

The floor of the Chicago Board of Trade, a major c...

Chicago Mercantile Exchange building 20 S. Wacker ...

In this paper, we have taken into analysis two energy contracts: Henry Hub Natural Gas (NG) and Light Sweet Crude Oil Futures (CL).

The volatility in natural gas prices over the course of the past years has resulted in an increased emphasis on risk management activities by industry participants. Henry Hub Natural Gas (NG) Futures allow all those market participants' significant hedging activity to manage risk in such highly volatile natural gas price. And Light Sweet Crude Oil Futures (CL) provide hedging instrument for oil traders to increase their flexibility in managing business risk.

2, CME GROUP AN OVERVIEW :

The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc") is an American financial and commodity derivative exchange based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an agricultural commodities exchange. Originally,