While some of these seemingly bizarre futures contracts see volume on a regular basis, many have yet to catch on, or are meant for a very specific and niche clientele. Not all these futures are "bizarre"; the underlying products are likely familiar in many cases, but most people just aren't aware that these products are tradable via futures contracts in the U.S. Here are 25 bizarre futures, separated into four broad headings: Food, Energy, Volatility & Currencies, and Spreads.
Bizarre Food Futures
You may know the food, but you probably didn’t know that futures were traded on it. Futures allow a farmer or a producer to lock in a price for their crop, animals or product for later delivery.
Yup, you can trade cheese futures on the Chicago Mercantile Exchange (CME) under symbol CSC. Volume is between 50 to 300 contracts per day. The contract size is 20,000 pounds of cheese.
Milk is also traded via futures contract. On the CME Class III (symbol: DC) and Class IV (symbol: GDK) milk are traded; Class III milk is used to make hard cheeses and has daily volume between 500 and 2000 contracts per day. Class IV is used to make butter and dry milk products, and has daily volume between 0 and 250 contracts per day.
The contract size is 200,000 pounds of the milk.
3. Non-Fat Dry Milk
Trading under symbol GNF, each contract traded on the CME is for 44,000 pounds of non-fat dry milk. Daily volume is typically between 10 and 200 contracts.
4. Dry Whey
Used as a protein supplement, dry whey trades on the CME under symbol DY. Each contract is for 44,000 pounds and daily volume is typically between 1 and 100 contracts.
Butter isn’t bizarre, but most people don’t know it trades on the CME under symbol CB. Each contract is for 20,000 pounds of butter and daily volume is between 50 and 300 contracts.
Most people have heard of wheat, corn and soybean futures, but oats also make the list. It trades on the CME under symbol ZO. One contract is for 5,000 bushels (approximately 86 metric tons) and daily volume is between 100 and 2,000 contracts.
Rice is another food not often considered a futures tradable good, yet the market is fairly active with 200 to 2,000 contracts changing hands daily. It trades on the CME under symbol ZR and each contract is for 2,000 hundredweights (approximately 91 metric tons).
8. Orange Juice
Considered by many traders to be one of the craziest markets to trade based on daily price gaps, Frozen Concentrated Orange Juice futures trade on Intercontinental Exchange (ICE) under the symbol OJ. Each contract is for 15,000 pounds of orange juice solids. Four hundred contracts or more typically change hands daily, with volume capable of spiking to 20,000 contracts.
Futures contracts are traded on many other foods and “soft” products, such as cocoa, sugar, coffee, canola, barley and cotton
Bizarre Energy Futures
9. Emission Allowances
The CME and Intercontinental Futures Exchange (ICE) both offer emissions products. The most active product on the CME is the In Delivery Month European Union Allowance Futures Contract (symbol: EAF), trading between 0 and 10,000 contracts daily. Each contract is for 1,000 European Union Allowances (EUA); each EUA is an entitlement to emit one ton of carbon dioxide-equivalent gas. They were introduced as a way to potential curb carbon dioxide emissions.
The ICE EUA Futures (monthly) contract is slightly more active, and trades under symbol C.
There are 205 electricity futures contracts listed on the CME, most of which do zero volume on a daily basis. ICE also offers a significant number of electricity contracts. The futures contracts are based on electricity prices around the world.
While these markets aren’t typically actively traded day to day, some days see significant volume. The PJM Western Hub Real-Time Off-Peak Calendar-Month 5 MW Volume contract, trading on the CME under symbol N9L typically has a lot of open interest and some days can see volume of more than 100,000 contracts. Several other electricity contracts trade in a similar fashion – high volume some days, but no volume on most days.
The radioactive substance trades on the CME under symbol UX. Each contract is 250 pounds of Uranium. There is typically open interest in the contract but there is very little, if any, volume on a day-to-day basis.
12. Highway Diesel Prices
Trading on the CME under symbol AA5 the EIA Flat Tax On-Highway Diesel Futures are based on the average weekly price (adjusted for tax rates) of highway diesel as published by the Energy Information Administration (EIA). The contract is for 42,000 gallons of diesel.
On most days the contract does no volume, but spikes occasionally up to 1,000 contracts per day.
13. Retail Gasoline Prices
Hedge price increases at the pump with EIA Flat Tax Retail Gasoline Futures (symbol: JE) on the CME. The contract is based on the weekly average retail price of regular grade gasoline, adjusted for tax rates. Each contract is for 42,000 gallons of gasoline, the there is typically zero volume and negligible open interest.
The flammable gas trades via the Mont Belvieu Spot Ethylene In-Well Futures (symbol: MBE) on the CME in 100,000 pound units. There is typically open interest in the contract but volume is sporadic, with 0 to 500 contracts changing hands daily.
A similar contract is based on the average ethylene price (extracted) for Mont Belvieu and trades under the symbol MBR; it has similar volume to the former.
Bizarre Volatility & Currency Futures
The CME and ICE offer a number of different “freight route” futures contracts, allowing for the hedging of freight costs through various regions. The Freight Route TC2 (Baltic) Futures (symbol: TM) on the CME typically has some open interest and sporadically trades a few contracts per day, with no volume on most days.
16. Currency Volatility
The Euro Quarterly Variance future on the CME (symbol: VEQ) tracks the volatility of the euro. While there is general open interest in the contract, there is typically no volume.
Similar contracts are available for different time frames and for the Yen, Australian dollar and British Pound.
17. Israeli Shekel Futures
The CME offers trade in a number of small illiquid currencies. Israeli Shekel futures are one example, trading under symbol ILS. Daily volume ranges from 0 to 300 contracts, with most days near 0. Each contract is for 1,000,000 Israeli shekel.
18. Euro/Polish Zloty
Another small currency tradable via futures on the CME is the Euro/Polish Zloty (symbol: EPZ) cross-rate futures contract. It trades several to several hundred contracts daily, and each contract is for 500,000 Polish zloty.
19. Gold Volatility Index Futures
Trading under symbol GVF on the CME this future tracks the volatility of gold. There is typically no volume and no open interest.
A number of other silver and gold variance and volatility based futures trade on the CME, including Gold Quarterly Variance and Silver Calendar Variance futures. These also typically have no volume and no open interest.
Bizarre Spread Futures
There are many seemingly bizarre spread futures that are based on the difference between two more commodities or products.
20. Germany (De)-Netherlands (Nd) Sovereign Yield Spread Futures
These futures trade under symbol DNV and are based on the difference of the yield-to-maturity of German and Netherlands government-issued bonds. The contract is based on yields, where 0.01 points = 1 basis point = 100 Euros. Typically there is no volume in this contract.
21. UK-Italy (It) Sovereign Yield Spread Futures
Similar the German-Netherlands contract, the UK-It contract trades under symbol KTV. 0.01 points = 1 basis point = 100 Pounds Sterling. This contract also typically has no volume.
There are a host of other sovereign yield spread futures listed on the CME including U.S – Netherlands , U.S.-UK, and UK-France. All typically have no volume.
22. Gulf Coast Fuel Oil vs. European Fuel Oil
Quite a mouth full, the Gulf Coast No. 6 Fuel Oil 3.0% (Platts) vs. European 3.5% Fuel Oil Barges FOB Rdam (Platts) Futures trade on the CME under symbol GCU. The price of the contract is determined by the difference of the average prices of the two underlying contracts. The contract is actively traded, with daily volume between 50 and 2000 contracts.
23. Crack Spread Futures
The 3.5% Fuel Oil Barges FOB Rdam (Platts) Crack Spread Futures is based on the difference between the 3.5% Fuel Oil Barges average price and Brent Crude Oil (ICE) futures. Volume ranges between about 20 and 1500 contracts daily. The contract trades on the CME under symbol FO.
24. Gulf Coast Gas vs. RBOB Gasoline
The price for each Gulf Coast Unl 87 Gasoline M1 (Platts) vs. RBOB Gasoline Futures Contract is equal to the average of the Platts U.S. Gulf Coast Unl 87 gasoline pipeline mean minus the NYMEX New York Harbor RBOB Futures. The contract sees volume on the CME most days, with daily volume between 50 and 2000 contracts.
25. Soybean-Corn Price Ratio
The price of this contract is determined by the soybean futures price divided by the corn futures price. It is called the Soybean-Corn Price Ratio Synthetic future (symbol: CSI) and is available through the CME. The contract typically has no volume and no open interest.
The Bottom Line
In many cases the underlying product(s) of these futures aren’t that bizarre; however, the fact that they can be traded via a futures contract is unknown to most people. Some of these futures have an active market, although typically the volume is sporadic and considered low by many traders’ standards. Most of these contracts are traded by companies that have some sort of vested interest in the underlying product(s), or use the futures for hedging purposes. The average trader is likely wise to seek profits in on more liquid, less bizarre markets.