What does Contract Market mean?
Contract market is a term used for a designated contract market (DCM). It is an exchange on which commodities and option contracts are traded. A contract market needs to be registered with the concerned regulatory authority such as Commodity Futures Trading Commission (CFTC).
Futures Knowledge Explains Contract Market
Contract market provides a place or platform where contracts can be sold or bought. For example, future contracts for commodities are traded on the commodity exchanges such as the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange ICE. Contract Markets are supervised and regulated by the regulators to ensure their smooth operations and protect the interest of all counterparties. This mitigates the risk of defaults.