Unbelievably Futures Trading dates back to 17
Century Japan. The first ever case noted concerned rice. However,
there is also evidence that rice futures were traded in China as
far back as 6,000 years ago.
Future trading is a natural progression of things in response
to the difficulties of maintaining a year round supply of
products which are dependable on seasons like agricultural crops.
In ancient Japan, rice used to be stored in warehouses for future
consumption by the rice merchants. To raise funds, these
merchants would then sell their "rice tickets" (receipts of the
stored rice). Later, these rice tickets came to be regarded as a
sort of all-purpose currency. As trading in rice tickets became
more widespread, rules to standardize the trading of these rice
tickets were introduced. In a way, these rules were akin to the
current rules of the US Futures trading.
Futures trading began in the US only towards mid 1800s. The
Chicago Board of Trade (CBOT) was setup in 1848. The
New York Coffee
and Produce exchanges were only established in the 1870s and
1880s. Up to today, there are already ten commodity
exchanges established in the US, with the CBOT being the largest.
The other established exchanges are The Chicago Mercantile
Exchange, New York Mercantile Exchange, New York Commodity
Exchange and New York Coffee,
and Cocoa Exchange.
Globally, there are Futures trading exchanges in more than
twenty countries with the major exchanges being located in:
- New Zealand
which are traded on these exchanges range from agricultural
products like Corn, Wheat, Red Beans to Rubber.
In the US, Futures trading is regulated by a Department of
Agriculture's sub agency known as the Commodity Futures Trading
Commission. It has regulatory authority over commodity advisors,
brokerage firms, futures exchanges and money managers.
This is chapter number 1 out of 13. Read the rest:
Commodity Trading - Chapter 2: Commodities
Commodity Trading - Chapter 3: What is
Commodity Trading - Chapter 4: Using Commodity
Trading as an Investment Vehicle
Commodity Trading - Chapter 5: Advantages of
Commodity Trading - Chapter 6: Disadvantages of
Commodity Trading - Chapter 7: Risks of
Commodity Trading - Chapter 8: Risk
Commodity Trading - Chapter 9: Steps To Undertake
While Trading In Commodity
Commodity Trading - Chapter 10: Commodity Trading
- a losers Game?
Commodity Trading - Chapter 11: Learning to Trade
Commodity Trading - Chapter 12: Creating a
Commodity Trading - Chapter 13: Stress of