Contract Specifications

Trade Mogul
September 2013

Contract Specifications

2013

Brent Crude
Brent Crude is a major trading classification of sweet light crude oil comprising Brent Blend, Forties, Oseberg and Ekofisk crudes (also known as BFOE), all sourced from North Sea. Brent is the leading global price benchmark for Atlantic basin crude oils, pricing two thirds of the worlds internationally traded crude oil supplies. It was originally traded on the open outcry International Petroleum Exchange in London, but since 2005, it has been traded on the electronic Intercontinental Exchange, known as ICE.

Contract specifications
ICE Brent Crude futures contract Contract size : 1,000 barrels (42,000 US gallons) Contract month listing : All calendar months Settlement procedure : Cash/ Physical delivery Quotation : The contract price is in US dollars and cents per barrel Minimum price increment : One cent per barrel, equivalent to a tick value of $10 Trading hours : 5:30 am 3:30 am IST (22 hours) Expiration date : The 15th day before the first day of the contract month

Factors affecting Brent crude oil futures

Any factor that affects either the supply or the demand of oil around the globe, will affect the Brent oil market. Apart from having its own fundamentals, performance of the economy on a whole will have an effect on oil. Some of the important ones currently governing this market have been listed below: 1. 2. 3. 4. 5. 6. North Sea production Middle-east and North African tensions (Iran, Syria, Libya, Egypt etc.) Actions by central banks (Fed & ECB) Weekly US crude inventory data (released by EIA) Prices of other grades such as Russian Urals, West African crude, etc. Refinery maintenance season & refinery margins

FUTURES FIRST | CONFIDENTIAL

Contract Specifications

2013

SP500
The SP500 is the benchmark stock index of the United States representing the market capitalization of 500 different US companies in various sectors such as Financials, Energy, Consumer goods, Utilities, Technology, Industrials, Healthcare and Telecom.

Contract specifications
CME E-mini S&P 500 Futures Contract size : $50 x E-mini S&P 500 futures price Contract month listing : Mar, Jun, Sep and Dec Settlement procedure : Cash Quotation : The contract price is in US dollars Minimum price increment : 0.25 index points=$12.50 Trading hours : 3:30 am 2:45 am (IST) (Trading halted from 1:45 am 2:00 am IST) Expiration date : 3rd Friday of contract month

Factors affecting E-mini S&P 500 futures

1. The Federal Reserve (Central Bank): Any interest rate or policy change directly affects money supply in the system and investor confidence which in turn moves equity prices. 2. Performance of major industries: They project investor sentiments regarding the Equities & hence affect Index prices 3. Economic data: They represent current economic situation which in turn drives respective stock prices & investor sentiments. Following are the major economic data: a. Inflation b. Growth c. Unemployment 4. Cross rate effects: Most of the global economies are interlinked & this is what links different equity markets 5. Political factors: Politics will affect policy decisions which drive respective stock prices.

FUTURES FIRST | CONFIDENTIAL

Contract Specifications

2013

Gold
Gold or the yellow metal as it is fondly referred has been a relative store of value for centuries where it both acted as a medium of exchange as well as an investment vehicle. Often regarded as a safe haven, Gold is one commodity which continues to be widely tracked both by the investment community as well as the central bankers around the world to understand the confidence levels in the global financial system.

Contract specifications
COMEX Gold futures Contract size : 100 Troy ounces Contract month Listing : Feb, Apr, Jun, Aug, Oct and Dec Settlement procedure : Physical delivery Quotation : The contract price is in US dollars per Troy ounce Minimum price increment : $0.10 per troy ounce Trading hours : 3:30 am to 2:45 am (IST) (23 hrs 15 mins) Expiration date : 3rd last business day of the delivery month.

Factors affecting gold

In the current post apocalyptic world of uncertainty, Gold has become sensitive to economic data around the world as investors continue to weigh the health of the global economy with every emanating data point. Actions by central banks wanting to backstop economies would effectively mean that policy announcements by central bankers have gained even more significance in predicting the price of the yellow metal in recent times. 1. 2. 3. 4. 5. 6. 7. 8. Global economic data Central bank policy announcements and currency interventions Geo-political tensions and unexpected shocks Fluctuations in the global reserve currency - Dollar Perceived creditworthiness of major economies of the world Touchy Investor sentiment causing a flight to quality Demand from traditional sources such as jewellery, bar and coins Proliferation of Exchange Traded Funds (ETFs)
FUTURES FIRST | CONFIDENTIAL

Contract Specifications

2013

Euro
Euro, also nicknamed as The Single Currency, is official currency of 17 of 28 European Union members, collectively known as Eurozone. Beside these, several other European countries and dependent territories outside the EU also use Euro as legal tender. Euro is second largest reserve currency in the world next only to USD. In value terms GBP and JPY, the 3rd and 4th largest reserve currency, stand almost onesixth to Euro individually. Unlike other countries, which give rights to its own central bank to print currency and control money supply, the supply of Euro is controlled by only one body European Central Bank (ECB). A combined currency for European Union was conceptualized in 1992 in the Maastricht Treaty but the name Euro was officially adopted only on Dec 16, 1995.

Contract Specification
CME EUR/USD futures Contract size : 125,000 Euros Contract month listing : Mar, Jun, Sep and Dec Settlement procedure : Physical delivery Quotation : The contract price is in US dollars per Euro Minimum price increment : $.0001 per euro (= $12.50) Trading hours : 3:30 am - 2:30 am, (IST) (23 hours) Expiration date : 2nd business day immediately preceding the 3rd Wednesday of the contract month

Factors affecting Euro

1. Interest rate differential between Europe and the US 2. Investment scenario supported/restricted by government policies 3. Macroeconomic performance: This leads to increase/decrease of investment in Eurozone. Major drivers include: GDP growth, housing sector growth, industrial investment, retail sales, inflation, employment and Trade balance 4. Geopolitical risk scenario which includes political uncertainty like election, loss of support in coalition govt; threat of war; natural calamity etc.

FUTURES FIRST | CONFIDENTIAL