Overview

Looking back into economic history, the US city of Chicago, blessed as it was with Midwestern grain and a highly strategic location, was developing rapidly as a major center for the storage, sale and distribution of grain.[1] However, the ease with which grain commodities could be distributed and sold was ultimately not in line with production capacity. Consequently, as time wore on, a persistent lack of storage and distribution capabilities ultimately led to the prices of grain commodities surging. Thus, in a bid to provide greater stability and sustainability regarding the trading of grain commodities, a group of merchants formed the Chicago Board of Trade (CBOT), thus inaugurating the era of what later came to be called futures trading.[2]