Contract Market

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Definition: Contract Market

Contract market is a place where trade of futures, option contracts or commodities is done, which is registered under the regulatory oversight of Commodity futures trading commission (CFTC). 

Commodity Futures Modernization Act (CFMA) has a few things which needs to be taken care of by all the markets. This needs to be done when trading of securities, futuresetc is done. They are also called “Designated Exchange”.

Thus to be designated as a contract market, a board must demonstrate that they meet all the criteria which include capacity to prevent market manipulation and to ensure fair trading by establishing and enforcing trading rules.

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