![]() Trading was not extremely active in the beginning, and the Board tried to lure business by offering free lunches. The Board standardized bushel sizes and established ways of identifying different grades of grain. The founding group also included a grocer, a tanner, a hardware merchant, a banker, a bookseller, and a druggist. The directors were not all grain merchants. The Chicago Board of Trade first consisted of 25 directors who met in a space above a feed store on Water Street. Big buyers of grain benefited by assuring themselves in advance a specific supply. At planting time, a farmer could negotiate the price he would get at harvest time. The Board of Trade offered farmers a way to get a guaranteed price for their goods ahead of time by offering 'to arrive' contracts, or futures. Other farmers found that they could not get a fair price for their corn or wheat, and they ended up dumping it into Lake Michigan rather than pay to haul or store it. Some farmers kept their grain back from market, preferring to burn it for fuel rather than waste money shipping it when prices were low. At harvest time, Chicago was inundated with grain, and farmers had to accept extremely low prices. In the winter, when grain was scarce, the price was high. Farm prices were ruled by boom and bust cycles. ![]() ![]() The Chicago Board of Trade was formed in that city in 1848 by a group of businessmen who wanted to bring order to the Midwest's chaotic grain market. As of March 2001, the CBOT planned to move ahead with restructuring and to form an alliance with the electronic German/Swiss exchange Eurex. This restructuring was bogged down by negotiation and litigation between the CBOT and the other Chicago exchanges, the Chicago Board Option Exchange and the Chicago Mercantile Exchange, and by indecision on the part of CBOT members and executives. The CBOT announced a decision to transform itself into a for-profit corporation with two separate trading areas, one electronic and one open outcry. By the early 2000s, the future direction of the CBOT was still under consideration. Open outcry trading fell out of use at other leading exchanges in the 1990s, and the future of CBOT's trading pits was increasingly called into question. The CBOT adopted a computerized trading system for some trades in the late 1990s. Trades are accomplished through a so-called open outcry system, where traders meet face-to-face to make transactions in trading rooms known as pits. The CBOT operates as a not-for-profit corporation run by its members and a Board of Directors. Annual trading volume is more than 200 million contracts. Treasury bonds, silver, soy beans, wheat, and Dow Jones Industrial Average futures. The Board of Trade has more than 3,600 members, who trade almost 50 different futures and options products, including U.S. Treasury bonds, which become the exchange's most active item.Ģ001: New CEO reaffirms plans to restructure CBOT as for-profit company, with electronic trading component.Ĭhicago Board of Trade (CBOT) is one of the busiest commodities exchanges in the world. ![]() The marketplace assimilates new information throughout the trading day, and through trading it translates this information into benchmark prices agreed upon by buyers and sellers.ġ848: The company is founded by 25 Chicago businessmen.ġ859: A charter is granted by the Illinois legislature.ġ922: Grain Futures Act of 1922 establishes first federal control over futures trading.ġ973: Chicago Board Options Exchange is founded.ġ977: CBOT begins trading in U.S. Its markets provide prices that result from trading in open auction or electronic platforms. The CBOT's principal role is to provide contract markets for its members and customers and to oversee the integrity and cultivation of those markets. NAIC: 52321 Securities and Commodity Exchanges Operating Revenues: $184.7 million (1999)
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