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