Chicago Board Of Trade (CBOT)
The Chicago Board of Trade (CBOT®), established in 1848, is the world’s oldest
derivatives (futures and futures-options) exchange. More than 3,600 CBOT members trade 50 different
futures and options products at the CBOT, resulting in 2002 annual trading volume of more than 343
Chicago Board Of Trade (CBOT)
Early, in its history, the CBOT listed for trading only agricultural instruments—such as wheat, corn
and oats. In 1975, the CBOT expanded its offering to include financial contracts, initially, the U.S.
Treasury Bond futures contract which is now one of the world’s most actively traded. The CBOT listings
expanded again in 1982, when options on futures contracts were introduced, and on October 6, 1997, the
CBOT made history again when it launched one of its most successful contracts—futures and
futures-options on the Dow Jones Industrial Average.
For more than 150 years, the primary method of trading at the CBOT had been open auction, during which
traders meet face-to-face in trading pits to buy and sell futures contracts. Then, on October 20, 1994
the CBOT successfully launched its first electronic trading system.
The Chicago Board of Trade principal role is to provide contract markets for its members and customers and to oversee
the integrity and cultivation of those markets. Its markets provide prices that result from trading in
open auction or electronic platforms. 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.
The CBOT’s markets also provide opportunities for risk management for users who include farmers,
corporations, small business owners, and others. Risk management, in the form of hedging, is the
practice of offsetting the price risk inherent in any cash market position by taking an equal but
opposite position in the futures market. Hedgers use CBOT futures markets to protect their businesses
from adverse price changes that could have a negative impact on their bottom line.
The Chicago Board of Trade presently is a self-governing, self-regulated Delaware not-for-profit, non-stock corporation
that serves individuals and member firms. There are several types of memberships within the CBOT, which
allow access to all or some of the markets listed at the exchange. Of the Chicago Board of Trade’s 3,600 members, 1,400
are full members who have trading access to all of the exchange’s contracts.
The governing body of the exchange consists of the President and CEO and Chairman and 14 directors.
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