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Chicago Board of Trade: For Cryin
Chicago Board of Trade: For Cryin' Out Loud
Published: 2015/07/06
Channel: MediaBurnArchive
CHICAGO BOARD OF TRADE TRADING PITS WHEN ELECTRONIC PLATFORM CRAHSES
CHICAGO BOARD OF TRADE TRADING PITS WHEN ELECTRONIC PLATFORM CRAHSES
Published: 2015/05/20
Channel: ConorsHead
My Word Is My Bond, A Documentary on the Chicago Board of Trade
My Word Is My Bond, A Documentary on the Chicago Board of Trade
Published: 2010/01/11
Channel: Production Craft
The Chicago Board of Trade Friday December 31 1999
The Chicago Board of Trade Friday December 31 1999
Published: 2013/09/22
Channel: rvoves72
Mike Forrester Reflects on 50-years of trading at the CBOT
Mike Forrester Reflects on 50-years of trading at the CBOT
Published: 2016/04/20
Channel: John Lothian News (JLN)
A day at the cbot
A day at the cbot
Published: 2013/12/10
Channel: spartansrule17
Chicago Trading Floor Tour by Ben Affleck :)
Chicago Trading Floor Tour by Ben Affleck :)
Published: 2014/04/01
Channel: Tim Martynov
FLOORED The Complete Documentary Film
FLOORED The Complete Documentary Film
Published: 2013/07/31
Channel: flooredmovie
Chicago Board of Trade Futures Trading Pits
Chicago Board of Trade Futures Trading Pits
Published: 2012/10/07
Channel: BuffaloStormChaser
JOEY THAT GUY FILM... Joey on the floor at The CBOT (CHICAGO BOARD OF TRADE)
JOEY THAT GUY FILM... Joey on the floor at The CBOT (CHICAGO BOARD OF TRADE)
Published: 2014/03/26
Channel: Joey Kornatowski
Chicago Board of Trade Building: An Example of Art Deco
Chicago Board of Trade Building: An Example of Art Deco
Published: 2014/09/30
Channel: Chicago Architecture Foundation
CBOT Trading Soybean market pit trading.
CBOT Trading Soybean market pit trading.
Published: 2006/12/29
Channel: Bryan Shaughnessy
Metra fight... "I sit on the Board of Trade, I will cut you in half."
Metra fight... "I sit on the Board of Trade, I will cut you in half."
Published: 2013/06/13
Channel: Abbeyooo
Insider
Insider's glimpse to pit trading at the Chicago Board of Trade
Published: 2015/11/29
Channel: Van Ballantyne
Chicago Board of Trade Building: Top of the Trade
Chicago Board of Trade Building: Top of the Trade
Published: 2014/09/30
Channel: Chicago Architecture Foundation
The Beginning of a Futures Exchange: How the CBOT Started
The Beginning of a Futures Exchange: How the CBOT Started
Published: 2013/06/19
Channel: CME Group
Chicago Board of Trade Building: The Spirit of the Roaring 20s
Chicago Board of Trade Building: The Spirit of the Roaring 20s
Published: 2014/09/30
Channel: Chicago Architecture Foundation
Shutting down the Chicago Board of Trade
Shutting down the Chicago Board of Trade
Published: 2015/11/03
Channel: sonny garcia
Charles Carey Agriculture in Illinois Chicago Board of Trade Floor footage
Charles Carey Agriculture in Illinois Chicago Board of Trade Floor footage
Published: 2016/01/27
Channel: Abraham Lincoln Presidential Library and Museum
Traveling to Chicago Board of Trade via La Salle Boulvard
Traveling to Chicago Board of Trade via La Salle Boulvard
Published: 2014/09/23
Channel: R-Video Review
Chicago Board Of Trade Futures Prices ✔ Stock Market
Chicago Board Of Trade Futures Prices ✔ Stock Market
Published: 2014/06/07
Channel: Suzann
Chicago Board of Trade under construction - Part 1 of 2
Chicago Board of Trade under construction - Part 1 of 2
Published: 2009/08/19
Channel: Chicago Architecture Foundation
Rick Santelli on the floor of the Chicago Board of Trade
Rick Santelli on the floor of the Chicago Board of Trade
Published: 2009/02/20
Channel: John Angier
Chicago Board of Trade - Who Put This Dick On My Back?!?
Chicago Board of Trade - Who Put This Dick On My Back?!?
Published: 2016/11/19
Channel: robd003
Chicago Mercantile Exchange - Chicago Board of Trade Financial Trading Floor aka The Pit
Chicago Mercantile Exchange - Chicago Board of Trade Financial Trading Floor aka The Pit
Published: 2014/01/28
Channel: David N. Tuason
CBOT Bond Pit
CBOT Bond Pit
Published: 2006/09/01
Channel: ejm attom
Protest banner Chicago Board of Trade
Protest banner Chicago Board of Trade
Published: 2007/10/10
Channel: Chicago Tribune
Chicago Board of Trade under construction - Part 2 of 2
Chicago Board of Trade under construction - Part 2 of 2
Published: 2009/08/19
Channel: Chicago Architecture Foundation
Chicago Board of Trade
Chicago Board of Trade
Published: 2009/01/03
Channel: David Lin
Shutting down Chicago Board of Trade November 2, 2015
Shutting down Chicago Board of Trade November 2, 2015
Published: 2015/11/03
Channel: sonny garcia
Chicago Board of Trade Vault
Chicago Board of Trade Vault
Published: 2013/10/21
Channel: Real ESO
Chicago Merc hand signals: Dying art
Chicago Merc hand signals: Dying art
Published: 2010/07/21
Channel: CNNMoney
Chicago Board of Trade Building: Chicago
Chicago Board of Trade Building: Chicago's Entrepreneurial Spirit
Published: 2014/09/30
Channel: Chicago Architecture Foundation
Chicago Board of Trade = Fail!
Chicago Board of Trade = Fail!
Published: 2011/11/06
Channel: TheBarefootPunk
GCE at the Chicago Board of Trade
GCE at the Chicago Board of Trade
Published: 2013/02/21
Channel: Tim Reed
Protest at Chicago Board of Trade
Protest at Chicago Board of Trade
Published: 2011/10/07
Channel: tjanas
Final closing bell of CBOT wheat futures trading pit on July 6, 2015
Final closing bell of CBOT wheat futures trading pit on July 6, 2015
Published: 2015/07/06
Channel: tradingpithistory
The Other Rick at Chicago Board of Trade
The Other Rick at Chicago Board of Trade
Published: 2012/03/08
Channel: Charlie Lutz
Chicago Board of Trade
Chicago Board of Trade
Published: 2012/05/11
Channel: JeffryHarrison
2012/10/25 Chicago Board of Trade CBOT CME Trading Floor 3
2012/10/25 Chicago Board of Trade CBOT CME Trading Floor 3
Published: 2012/10/25
Channel: eHBM Inteligencia Mercados
The Changing Face of Commodity Trading
The Changing Face of Commodity Trading
Published: 2014/04/11
Channel: IowaPublicTelevision
Chicago Board of Trade Drops Leaflets On Occupy Protesters (Raw Clip)
Chicago Board of Trade Drops Leaflets On Occupy Protesters (Raw Clip)
Published: 2011/10/27
Channel: The Wigwam
#ChicagonistaLIVE at Chicago Board of Trade hosted by Atrium Wealth Advisors
#ChicagonistaLIVE at Chicago Board of Trade hosted by Atrium Wealth Advisors
Published: 2013/09/12
Channel: chicagonista
Board of Trade Atrium
Board of Trade Atrium
Published: 2015/07/20
Channel: Chuck Sudo
CBOT
CBOT
Published: 2009/01/31
Channel: brightpei
Exclusive Web Tour of The Gulke Group at CBOT
Exclusive Web Tour of The Gulke Group at CBOT
Published: 2009/12/18
Channel: AgWebEditor
The 99% march on the Chicago board of trade may 23
The 99% march on the Chicago board of trade may 23
Published: 2012/05/24
Channel: nohj divad
Rick Santelli calls for Tea party on Floor of Chicago Board of Trade
Rick Santelli calls for Tea party on Floor of Chicago Board of Trade
Published: 2009/02/19
Channel: TheSmokingArgus
See Mom Run Hits the Chicago Board of Trade
See Mom Run Hits the Chicago Board of Trade
Published: 2009/12/08
Channel: Beth Feldman
Stop tax giveaway to Chicago Board of Trade (2012)
Stop tax giveaway to Chicago Board of Trade (2012)
Published: 2014/06/13
Channel: ILPeoplesAction
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WIKIPEDIA ARTICLE

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Coordinates: 41°52′40″N 87°37′56″W / 41.877821°N 87.632285°W / 41.877821; -87.632285

Chicago Board of Trade
Cbot.png
Type Subsidiary
Founded April 3, 1848
Owner CME Group

The Chicago Board of Trade (CBOT), established on April 3, 1848, is one of the world's oldest futures and options exchanges[citation needed]. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and electronic trading. Volumes at the exchange in 2003 were a record breaking 454 million contracts. On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form the CME Group. CBOT and three other exchanges (CME, NYMEX, and COMEX) now operate as designated contract markets (DCM) of the CME Group.[1]

History[edit]

Men working the floor at the Chicago Board of Trade as photographed by Stanley Kubrick for Look Magazine in 1949
Trading floor at the Chicago Board of Trade in 1993.

The concerns of U.S. merchants to ensure that there were buyers and sellers for commodities have resulted in forward contracts to sell and buy commodities. Still, credit risk remained a serious problem. The CBOT took shape to provide a centralized location, where buyers and sellers can meet to negotiate and formalize forward contracts.

In 1864, the CBOT listed the first ever standardized "exchange traded" forward contracts, which were called futures contracts. In 1919, the Chicago Butter and Egg Board,[2] a spin-off of the CBOT, was reorganized to enable member traders to allow future trading, and its name was changed to Chicago Mercantile Exchange (CME).

On October 19, 2005, the initial public offering (IPO) of 3,191,489 CBOT shares was priced at $54.00 (USD) per share. On its first day of trading the stock closed up +49% at $80.50 (USD) on the NYSE.

In 2007, the CBOT and the CME merged to form the CME Group.

In 2012, the CBOT expanded electronic trading hours to 22 hours per day to become more competitive in the industry. The open outcry hours remained the same.

Chicago Board of Trade Building[edit]

Since 1930, the Chicago Board of Trade has been operating out of 141 West Jackson Boulevard, Chicago, in a building designed by architects Holabird & Root that is 605 feet (184 m) tall, the tallest in Chicago until the Richard J. Daley Center superseded it in 1965. This Art Deco building incorporates sculptural work by Alvin Meyer and is capped by a 31-foot (9.5 m) tall statue of the Roman goddess Ceres in reference to the exchange's heritage as a commodity market. Ceres is faceless because its sculptor, John Storrs, believed that the forty-five story building would be sufficiently taller than any other nearby structure and as a result that no one would be able to see the sculpture's face anyway.

On May 4, 1977, the Chicago Board of Trade Building was designated a Chicago Landmark. The building is now a National Historic Landmark. Today the Board of Trade Building is closely joined by numerous skyscrapers in the heart of Chicago's busy Loop commercial neighborhood.

Trading platforms[edit]

The Pit[edit]

Clock on the front of the building.

The pit is a raised octagonal structure where open-outcry trading takes place. Operating during regular trading hours (RTH), the CBOT trading floor contains many such pits.

The steps up on the outside of the octagon and the steps down on the inside give the pit something of the appearance of an amphitheater, and allow hundreds of traders to see and hear each other during trading hours. The importance of the pit and pit trading is emphasized by the use of a stylized pit as the logo of the CBOT. The Pit is also the title and subject of a classic novel (1903) by Frank Norris.[3]

Trades are made in the pits by bidding or offering a price and quantity of contracts, depending on the intention to buy (bid) or sell (offer).

This is generally done by using a physical representation of a trader's intentions with his hands. If a trader wants to buy ten contracts at a price of eight, for example, in the pit he would yell "8 for 10", stating price before quantity, and turn his palm inward toward his face, putting his index finger to his forehead denoting ten; if he were to be buying one, he would place his index finger on his chin. If the trader wants to sell five contracts at a price of eight, they would yell "5 at 8", stating quantity before price, and show one hand with palm facing outward, showing 5 fingers. The combination of hand-signals and vocal representation between the way a trader expresses bids and offers is a protection against misinterpretation by other market participants. For historical purposes, an illustrated project to record the hand signal language used in CBOT's trading pits has been compiled and published.[4]

With the rise of electronic trading the importance of the pit has decreased substantially for many contracts, though the pit remains the best place to get complex option spreads filled.

Electronic trading[edit]

Electronic trading platforms operate virtually around the clock.

News lines[edit]

Board of Trade building
  • On August 1, 1974, trading at The Chicago Board of Trade was halted after an anonymous caller said a bomb had been placed in the building.
  • On October 22, 1981, trading was halted on the Chicago Board of Trade and the Philadelphia Stock Exchange after anonymous callers said bombs had been placed in those buildings.
  • On August 1, 2006, the CBOT launched side-by-side trading for agricultural futures. Orders can now be traded electronically or placed by pit traders using open outcry, creating a single pool of liquidity.
  • On October 17, 2006, the Chicago Mercantile Exchange announced the purchase of the Chicago Board of Trade for $8 billion in stock, joining the two financial institutions as CME Group, Inc. CBOT currently uses outsourced technology platforms, but will move to CME's Globex trading system. This will provide much of the merger's anticipated savings. The merger will also strengthen the combined group's position in the global derivatives market.
  • On July 9, 2007 CBOT Shareholders approve merger with the Chicago Mercantile Exchange "creating the largest derivatives market ever." [5]

See also[edit]

References[edit]

Notes

  1. ^ "Futures & Options Trading for Risk Management". CME Group. 2012-09-24. Retrieved 2012-10-02. 
  2. ^ "Futures & Options Trading for Risk Management – CME Group". Cme.com. 2012-09-24. Retrieved 2012-10-02. 
  3. ^ "The Pit by Frank Norris – Project Gutenberg". Gutenberg.org. 2003-08-01. Retrieved 2012-10-02. 
  4. ^ "TradingPitHistory.com". CBOT Trading Pit Hand Signals. 
  5. ^ "Topic Galleries - chicagotribune.com". Chicago Tribune. 

Bibliography

  • Durica, Dr. Michael (2006). Product Development for Electronic Derivative Exchanges: The case of the German ifo business climate index as underlying for exchange traded derivatives to hedge business cycle risk. Pro Business. Berlin. ISBN 3-939533-05-X.
  • Ryan, Oliver (Nov. 14, 2005). "Chicago's Making A Contracts Killing". FORTUNE, p. 22.

Further reading

  • Emily Lambert (2011). The Futures: The Rise of the Speculator and the Origins of the World's Biggest Markets. Basic Books. 
  • Erika Olson (2011). Zero-Sum Game: The Rise of the World's Largest Derivatives Exchange. John Wiley & Sons. 
  • Leg the Spread: A Woman's Adventures Inside the Trillion-Dollar Boys' Club of Commodities Trading by Cari Lynn (Random House/Broadway Books) [1]

External links[edit]

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