A look at the Chicago Board of Trade

The Chicago Board of Trade has grown greatly over the years. The Board of Trade today ranks first among the world's commodity exchanges because some four hundred million bushels of grain flow from producer to consumer annually.

For more than 150 years, it used an open outcry trading system as its primary method of trading during which traders come face to face in trading pits to buy and sell futures contract. CBOT used to list only agricultural instruments-such as wheat, corn and oats for trading in the beginning. Since then, it has covered important milestones.

Milestones of the CBOT

· Further the Board of Trade expanded its listing in 1982, when it introduced options on futures contracts

· On October 20, 1994 the CBOT launched Project A, an electronic trading system, and in 2000 replaced Project A with the a/c/e electronic trading platform (alliance/CBOT/Eurex).

· On October 6, 1997, it launched one of its most successful contracts-futures and futures-options on the Dow Jones Industrial AverageSM.

The Chicago Board of Trade is organized as a not-for-profit membership association. It has several types of memberships, each having access to all or some of the contract markets designated at the exchange. Merchants, exporters, bankers, millers, elevator owners, cooperative farm groups, brokers, and insurance companies are members. The Chicago Board of Trade's growth is due largely to one outstanding fact - it markets the farmer's grain at a lower cost than the marketing of any other staple foodstuff.

CBOT’s marketplace assimilates new information throughout the trading day, and through trading it translates this information into benchmark prices agreed upon by buyers and sellers.

Over the years, the Chicago Board of Trade has consolidated its position and now it ranks among the world's largest commodity markets. The CBOT’s markets also provide opportunities for risk management for users that include farmers, corporations, small business owners, and others. Hedgers use CBOT futures markets to protect their businesses from adverse price changes that could have a negative impact on their bottom line. The governing body of the exchange consists of the President and CEO and Chairman and 14 directors.