Contract History
If
you are interested in trading Swiss Franc futures it is helpful to become familiar with the history of the Swiss Franc market.
Financial institutions, investment managers, corporations and private investors can use CME Swiss franc futures and
options on futures to manage the risks associated with currency rate fluctuation and to take advantage of profit opportunities
stemming from changes in currency rates.
Swiss
francs are an attractive instrument that can add to portfolio diversification for both lenders and borrowers. When the new
European currency the “euro” was introduced, the Swiss franc appreciated significantly against the euro in April
to September 2000, and remains one of the world's strongest currencies, worth today around two-thirds of a euro. The
return on Swiss franc and capital market instruments exhibit both a low volatility and a low correlation with the return on
foreign assets. One Swiss franc is typically divided into 100 centimes.
CME Swiss franc futures began trading in 1972, while options on futures trading became available
in 1985. CME currently offers markets for trading CME Swiss francs futures and options on CME Globex as well as on its trading
floor.
The CME Swiss franc contract is designed
to reflect changes in the U.S. dollar value of the franc. Futures contracts are quoted in U.S. dollars per franc, and call
for physical delivery at expiration. Physical delivery takes place on the third Wednesday of the contract month, in the country
of issuance at a bank designated by the CME Clearing House. Exercised options on futures contracts are settled by the
delivery of futures contracts.
The contract’s
size is 125,000 Swiss francs per contract. Trading occurs in $.0001 per Swiss franc, or $12.50 per contract. CME Swiss franc
futures trading may also occur in $.00005 per Swiss franc contract, equaling $6.25 per contract.
CME Swiss franc currency futures trade on six months in the March quarterly
cycle, Mar, Jun, Sep, Dec.; and also trades CME British pound/Swiss Franc, CME Euro FX/Swiss franc, and CME Swiss franc/Japanese
yen as part of cross rate currency futures. Options on futures contracts trade four months in the March cycle and two months
not in the March cycle, plus four weekly expirations.
