A market where standardized derivative contracts are traded, as defined by the exchange in terms of contract size, maturity, denominating currency, delivery date, and so on. It intermediates all related transactions and stands ready to interfere in case a counterparty defaults. Futures exchange, for example, takes initial margin from both counterparties of a futures trade in order to guarantee trade fulfillment.

Derivative exchanges have been in existence for a long time. Chronologically, rice futures was one of the earliest derivatives the world has ever known. This derivative was traded on the Dōjima Rice Exchange (which was actually the first futures exchange market in history) in Japan in the 1730s to accommodate for samurai fighters who were usually paid for their services in rice and needed a worthy conversion to coin especially at times of successive poor harvests. Also among the oldest derivative exchanges is the CBOT which was established in the United States in 1848 to act as an intermediary between farmers and merchants. Likewise, there is the CME (the Merc), which specializes now in the trading of futures and futures options. It was launched in 1919, inaugurating trading in butter-and-eggs futures (in addition to eggs and butter, it ventured almost 20 years later to trade in potatoes and onions and, occasionally, was involved in frozen eggs and cheese. It even introduced a contract in animal hides as a trial).

Nowadays, the world’s largest derivatives exchanges by volume are the Korea Exchange (which lists KOSPI Index Futures and Options), Eurex (which lists interest rate and index derivatives, among others), CME Group (which resulted from the merger of the CME and the CBOT in 2007, and the acquisition of the New York Mercantile Exchange in 2008). The BIS statistics illustrate that the overall turnover of the world’s derivatives exchanges (futures and options) reached USD 563.1134 trillion during the second quarter (Q2) of 2011. Turnover is measured as the notional amount of traded derivatives contracts.