Gapter 34: Futures and Futures Options 657 
The number of expiration months listed at any one time varies from one mar­
ket to another. Eurodollars, for example, have futures contracts with expiration dates 
that extend up to ten years in the future. T-bond and 10-year note contracts have 
expiration dates for only about the next year or so. Soybean futures, on the other 
hand, have expirations going out about two years, as do S&P futures. 
The day of the expiration month on which trading ceases is different for each 
commodity as well. It is not standardized, as the third Friday is for stock and index 
options. 
Trading hours are different, even for different commodities listed on the same 
futures exchange. For example, U.S. Treasury bond futures, which are listed on the 
Chicago Board of Trade, have very long trading hours (currently 8:20 A.M. to 3 P.M. 
and also 7 P.M. to 10:30 P.M. every day, Eastern time). But, on the same exchange, soy­
bean futures trade a very short day (10:30 A.M. to 2:15 P.M., Eastern time). Some mar­
kets alter their trading hours occasionally, while others have been fixed for years. For 
example, as the foreign demand for U.S. Treasury bond futures increases, the trad­
ing hours might expand even further. However, the grain markets have been using 
these trading hours for decades, and there is little reason to expect them to change 
in the future. · 
Units of trading vary for different futures contracts as well. Grain futures trade 
in eighths of a point, 30-year bond futures trade in thirty-seconds of a point, while 
the S&P 500 futures trade in 10-cent increments (0.10). Again, it is the responsibili­
ty of the trader to familiarize himself with the units of trading in the futures market 
if he is going to be trading there. 
Each futures contract has its own margin requirements as well. These conform 
to the type of margin that was described with respect to the cotton example above: 
An initial margin may be advanced in the form of collateral, and then daily mark-to­
market price movements are paid for in cash or by selling some of the collateral. 
Recall that maintenance margin is the term for the daily mark to market. 
Finally, futures are subject to position limits. This is to prevent any one entity 
from attempting to comer the market in a particular delivery month of a commodi­
ty. Different futures have different position limits. This is normally only of interest to 
hedgers or very large speculators. The exchange where the futures trade establishes 
the position limit. 
TRADING LIMITS 
Most futures contracts have some limit on their maximum daily price change. For 
index futures, it was shown that the limits are designed to act like circuit breakers to 
prevent the stock market from crashing. Trading limits exist in many futures con-
(