BCOM Subindex Futures Product Overview
Introduction
Bloomberg Commodity Subindex futures offer traders and investors a new and efficient way to gain exposure to the performance of various commodity index sectors. These futures contracts track the performance of Bloomberg’s benchmark Subindices, providing a flexible and capital-efficient tool for market participants. BCOM Subindex futures can help market participants manage risk and capitalize on market opportunities.
Available BCOM Subindex futures
The following BCOM Subindex futures are available for trading, pending all regulatory approvals:
- BAG: BCOM Agriculture Subindex futures
- BPE: BCOM Petroleum Subindex futures
- BEN: BCOM Energy Subindex futures
- BGR: BCOM Grains Subindex futures
- BAM: BCOM All Metals Subindex futures
- BLI: BCOM Livestock Subindex futures
- BPM: BCOM Precious Metals Subindex futures
Key features
Cash-settled contracts
BCOM Subindex futures are cash-settled, eliminating the need for physical storage and providing greater capital efficiency. This feature is particularly beneficial for traders who want to manage their exposure to specific commodity sectors without the logistical challenges of physical delivery.
Margin requirements
The margin requirements for BCOM Subindex futures are expected to be in line with other Commodity Index futures listed at CME Group exchanges. These lower margin requirements can offer up to 60% – 70% margin offsets and savings compared to over-the-counter (OTC) swaps, allowing clients to allocate more capital to their trading strategies.
Trading hours
BCOM Subindex futures are available for trading on the CME Globex electronic trading platform from Monday through Friday, 8:15 a.m. to 1:30 p.m. Central time (CT). ClearPort trading hours are from Sunday 5:00 p.m. CT to Friday 5:45 p.m. CT, with a daily 60-minute break from 5:45 p.m. to 6:00 p.m. CT.
Contract specifications
Contract size
The contract size for BCOM Subindex futures is comparable to the Bloomberg Commodity Index futures. The table below provides the contract multiplier and approximate notional value for each of the futures contracts (as of February 19, 2025):
| BCOM Subindex | Contract Multiplier | Approximate Notional Value |
| BCOM Agriculture | $250 | $15,500 |
| BCOM Petroleum | $50 | $9,350 |
| BCOM Energy | $250 | $8,000 |
| BCOM Grains | $250 | $8,500 |
| BCOM All Metals | $50 | $15,600 |
| BCOM Livestock | $250 | $6,250 |
| BCOM Precious Metals | $50 | $14,750 |
Tick size
The minimum tick for these Subindex futures is 0.01 index points, which is comparable to the penny increments of the parent BCOM futures.
Trading and execution
Flexibility in execution
BCOM Subindex futures are listed for electronic trading on the CME Globex electronic trading platform. They are also eligible for traditional and BTIC block trading, subject to Rule 526. This flexibility in execution allows market participants to choose the most suitable trading method for their needs.
Block trading
Block trading is available for both traditional and BTIC (Basis Trade at Index Close) block trades. BTIC block trades enable market participants to execute a futures transaction relative to the official cash index closing value of the underlying index. The minimum block trade size is 50 contracts in each of the BCOM Subindex futures contracts.
Exchange for Related Position (EFRP)
All eight BCOM Subindex futures are eligible for EFRP trades, including Exchange for Physical (EFP), Exchange for Risk (EFR) and Exchange of Option for Option (EOO). These trades are governed by CME Group Rule 538.
Benefits of BCOM Subindex futures
Capital efficiency
BCOM Subindex futures offer significant capital efficiency, with up to 60% – 70% margin offsets and savings compared to OTC swaps. This allows clients to put more capital to work and optimize their risk exposure.
Liquidity
These contracts provide access to a central limit order book (CLOB), enhancing liquidity and execution flexibility. Additionally, the strong average daily volume (ADV) and open interest (OI) growth for Commodity Index products at CME Group further underscores the liquidity benefits.
Hedging and exposure
BCOM Subindex futures enable market participants to hedge or gain exposure to individual commodity markets while potentially reducing the impact of individual asset volatility on their portfolios. This makes them a valuable tool for sector rotation strategies and relative value trades.
Trading examples
Agriculture sector example
Agricultural product futures can be used to manage price risk in the agricultural sector. For instance, a farmer who expects to sell a large quantity of corn at a later date can hedge against potential price declines by selling BCOM Grains Subindex futures contracts. If the price of corn falls, the futures position will offset the loss in the cash market.
Petroleum sector example
A petroleum company looking to lock in a selling price for crude oil can use BCOM Petroleum Subindex futures. By taking a short position in these futures, the company can protect itself against falling oil prices, ensuring a stable revenue stream.
Conclusion
Bloomberg Commodity Subindex futures offer a robust and flexible tool for trading and managing risk in individual commodity sectors. With a financially settled structure, lower margin requirements and access to a liquid market, BCOM Subindex futures provide market participants with the confidence to act in a complex and often uncertain world.