CHICAGO, Nov. 29 (UPI) -- The U.S. online broker E*Trade has announced plans to expand trading in futures contracts next year, the Financial Times reported Monday.
As part of preparation, the company has become the first online broker to buy Chicago Mercantile Exchange memberships, a move that will lower trading costs and let it tap into the exchange's growing range of futures aimed at smaller investors.
Joe Sellitto, director of derivatives products at E*Trade Securities, said while it already offered futures to some of its 3 million traders who inquired about them, E*trade wanted to reach "a much broader group than trades them now."
"Currently the user base is active, knowledgeable traders, but I believe there is a retail customer that has yet to realize the potential of futures as a risk management, hedging and asset allocation tool," Sellitto said.
Futures are contractual agreements to take delivery of a commodity or index, such as government bonds, wheat or the Standard & Poor's stock index, at a specified future date.
