Explore resources to start trading event contracts

The following changes will be applied to event contract product specifications, effective January 29, 2024:

• The contract size of all event contracts will change from a maximum of $20 to a maximum of $100, and the price range will change from 0-20 to 0-100. 
• Event contracts tied to E-mini S&P 500 and E-mini Nasdaq-100 futures contracts will be expanded to include longer-dated expiries (quarter-end and year-end). 

More details are provided below in the January 2024 Product Modifications section.

Event contracts are innovative products which allow market participants to trade their view on the market direction of varied futures contracts, spanning some of the world’s most trusted benchmark Equity Index, Energy, Metals, Cryptocurrency and Foreign Exchange futures markets. 

Event contracts seek to provide market participants with many of the attributes of traditional option markets, but within a range of potential outcomes. For instance, these contracts have a predefined profit and loss range and an accessible contract size of $100. 

No, a trader may liquidate a position at any time within exchange trading hours. Event contract trading is available Sunday 6:00 p.m. – Friday 4:00 p.m. ET, with a pause in trading during a daily maintenance period, Monday through Thursday, from 5:00 p.m. – 6:00 p.m. ET.

Contracts tick in 1-point increments between $0 and $100.  

Traders can choose from several price levels on both the buy/sell, and “yes” / “no” sides of the market, and these price levels reflect different probabilities. A trader can either hit / take immediately based on prevailing bids and offers in the market, or a trader can work orders at their desired price level.

Event contracts are uniquely structured to create a more approachable trading experience for a wider market audience. Increasing the accessibility of CME Group products to a broad array of market participants may potentially allow more traders to hedge risk and deploy strategies.  

Due to the approachable structure of the product, traders have the potential to build proficiency in hedging and market view expression.

Traders can take a view on a given event occurring, with tradable prices available in a predefined range between $0 and $100. At expiration of the contract, a contract price will expire at either $0 or $100; no other payoff is possible at expiration.

Therefore, the buyer’s risk is limited to the difference between the price paid and $0. For a seller, their risk is limited to the difference between 100 and the price at which the contract is sold.      

The multiplier of the event contracts is $1. For instance, if a trader bought a contract at a price of 55, and sold at 70, the profit for this trader would equal (70-55) * $1 = $15.  

For the avoidance of doubt regarding potential profit / loss outcomes, an event contract trader who trades one contract can never have a position with a contract value outside the range between $0 and $100. It is this pre-defined range of potential outcomes which differentiates event contracts from traditional cash-settled options contracts.

The following changes have been applied to event contract product specifications, effective January 29, 2024:

• The contract size of all event contracts changed from a maximum of $20 to a maximum of $100.
• The price range of all event contracts changed from a range fluctuation between 0-20, in 0.25 increments, to a range fluctuation between 0-100, in 1.00 increments.
• The array of expirations tied to E-mini S&P 500 and E-mini Nasdaq-100 futures contracts expanded to include additional “quarter-end” and “year-end” expiries. 
• This expiry expansion required an expanded strike array to accommodate additional potential outcomes over a longer time period.
• These new expiries carry open interest over time, and thus require daily settlement and overnight margining of event contracts for the first time. 

Similar to the contract size change, the tradable range has been modified in sync to increase accessibility and reduce frictions for traders. CME Group received feedback that this structure is more efficient and understandable in sync with the change to the dollar value of the contract. The “multiplier” of the contract will remain $1.

Yes, E-mini S&P 500 and E-mini Nasdaq-100 futures event contracts expiring at quarter-end and year-end have a wider strike array than same-day expiring contracts (with a one-day lifespan) to accommodate the wider potential range of outcomes possible over the course of a longer time frame.

Prior to the listing of these new longer-dated expiries, no other event contract had a life cycle longer than one day, and no open interest was carried overnight. Therefore, no daily settlement mechanism was necessary until now.

These two markets have received the most interest from the trading community to date, and were therefore the primary focus area for expansion. CME Group will review the potential for expansion of other event contracts spanning longer time frames in the future.

After conducting extensive market feedback, CME Group determined that market participants could benefit from a contract price level which more closely corresponds to the probability level associated with a contract expiring in-the-money.  

For example, previously, an event contract which had an 80% chance of finishing in-the-money would have been priced in the market at 16.00. This is because the option delta associated with such a contract would be .80 * $20 contract value = $16.  

With the new contract size, the same event contract, which has an 80% chance of finishing in-the-money would now be priced at $80, or .80 * $100. This change more closely ties the probability of a transacted price to the probability of a trade’s success, which will facilitate greater ease of use for traders.     

Market participants have been particularly interested in E-mini S&P 500 and E-mini Nasdaq-100 futures event contracts. CME Group has seen demand from traders to express a view on the market direction of these indices over a time frame longer than one day. In response, the exchange launched contracts expiring at the end of a given quarter and year.  

CME Group launched these new contracts in sync with the contract value and price range changes previously mentioned. The contract value and price ranges of all contracts have a 0-100 scale and $100 max price as of January 29, 2024.  

CME Group has built a pricing model specific to event contracts to allow for effective daily settlements of the products.

No, the margining of these products is not affected by daily settlement marks. Event contracts margining involves traders posting full margin for the max potential loss at trade inception.

For example, assume a trade occurs at a level of 40. A buyer will pay $40, covering their max possible loss of $40, with $60 the max possible gain. 

Alternatively, the seller concurrently receives $40 from the sale while also posting $100 in margin to cover the potential for the contract to expire at $100, a net outlay of $60 for the seller at the time of the trade. This treatment covers the seller’s max loss as well ($40 max possible gain). 

This scenario displays that the buyer/seller need only post their max possible loss, and that the clearinghouse possesses full margin on this trade, covering any market scenario in full. The clearinghouse will not release any of these funds until either the position expires or is liquidated in the open market, and no variation margin movements will occur as a result of daily settlement marks.

Contract specifications can be found here.

A “yes” event contract is successful if the price is greater than a predicted level. If the settlement price is exactly at a predicted price, a “yes” event contract will be treated as unsuccessful and will be settled at $0.

You will need to open an account with a participating brokerage firm supporting event contracts.

Find a participating brokerage firm here.

Event contracts are cash settled. Traders will not receive a futures contract upon settlement. Event contracts expiring at the end of a particular date will be settled automatically using the daily settlement price of the corresponding futures product. 

If the event contract’s price prediction is correct in relation to the daily settlement price, then the trade is successful; if the price prediction is incorrect, it will expire, and no further action is required.

Event contracts provide a way to express your view on where the price of CME Group futures contracts will close on a given expiration date. Event contracts open / close times are in sync with related CME Group futures contracts. You may trade to exit your position(s) before expiration. All contracts begin their trading session at 6:00 p.m. ET.

Featured products include:

Settlement time - 4:00 p.m. ET

Settlement time - 1:30 p.m. ET

Settlement time - 1:00 p.m. ET

Settlement time - 2:30 p.m. ET

Settlement time - 3:00 p.m. ET

Settlement time - 4:00 p.m. ET

As an example, assume a market participant is bullish on the E-mini S&P 500 futures contract, viewing that the contract will close above 4500 at the end of a particular date. This trader could buy the event contract on the E-mini S&P 500 Index futures expiring on that date, at a strike price of 4500. As the trader believes the futures market will close above this level, they buy the “yes” 4500 strike level contract. 

If the futures price closes below 4500 at expiration, the contract will expire at $0; if the futures close is above 4500, the trade will be profitable, and the contract will expire at $100. The value at expiration can only be $0 or $100 at expiration, but trading will occur between these levels prior to expiration as the probability of an outcome changes due to market fluctuations.

Yes. If a trader bought an E-mini S&P 500 4500 strike option, the difference between a final settlement value of the 4501 and 4750 would be very material to the profit / loss of the trader in question. Both of these potential settle values would result in an in-the-money vanilla option, however, with vastly different payoffs.

At expiration, traditional cash-settled vanilla options have profit / loss dependent on the size of the price difference between the strike price and final settlement price. Therefore, for traditional cash-settled vanilla options, max profit / risk is not predefined as it is for event contracts which have payoffs that are truncated to limit risk, by design, between $0 and $100.

At the time of execution, assume E-mini S&P 500 futures are trading a few points higher than the strike, at 4510. As a result, the “yes” event contract is observed to be trading near 55. The market is stating that there is roughly a 55% probability that the index will finish above the 4500 level. A trader should keep in mind that the market is assigning this probability to the contract price due to a number of factors, including the difference between the current price and the strike, as well as market volatility and time until contract expiration. All of these factors are encapsulated into the current market price of the contract.

No. The scale of the difference between the strike price and the settlement price on expiration date is not relevant for event contracts. For instance, the value of the event contract at expiration would not be different in the previous example, whether E-mini S&P 500 futures closed at 4501 or 4750. If the close is above the strike price, the contract will expire at a value of $100.

Continuing with the prior example, assuming the trader bought the 4500 strike contract at 55. Subsequent to the trade, if we assume the market moved higher, the trader might decide to liquidate their trade at prevailing market prices.

Near the end of the trading day, assume the trader sees a 70 bid for their position. They decide to exit their position by selling their contracts at a price of 70, netting a 15-point profit. As the trader has no position remaining, they are indifferent where the index closes that day after liquidating their position in the open market.

Delayed quotes will be available on cmegroup.com/eventcontracts. You can also access quotes through participating brokers here.

CME Group will only adjust contract expiration dates in the event of observed holidays by the United States; otherwise, contract expirations will remain at their regularly scheduled dates.

Event contracts will follow the normal CME Group business days calendar – event contracts will not have a trade date when the related futures product has a holiday and does not have an official trade date

View the holiday calendar here.

Exchange fees can be found on the CME, CBOT, and NYMEX/COMEX Fee Schedules.