Chicago Board of Trade

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Chicago Board of Trade
Founded 1848
Headquarters 141 W. Jackson Blvd., Chicago, IL 60604

Image: 200 pixels

Key People See CME Group
Products Futures and options on futures: agricultural, interest rates, Dow stock indexes, precious metals

The Chicago Board of Trade (officially, the Board of Trade of the City of Chicago) is the oldest and one of the largest futures exchanges in the world. It is currently part of the CME Group.

The 159-year-old Chicago Board of Trade was acquired by Chicago Mercantile Exchange (CME) in July 2007 to form CME Group, just less than two years after it went public in 2005. The union of the two exchanges established CME Group as the world's largest and most diverse exchange, with products spanning all major asset classes.

Volume for the CBOT in 2017 was 1.4 billion, up 10.5 percent from the previous year.[1]


The Chicago Board of Trade was founded on April 3, 1848, by 83 merchants at 101 South Water Street.[2][3] It developed standardized futures contracts in 1865. Over the years the exchange established itself as an icon for futures trading and finance in the City of Chicago, nationally and internationally.

At the second meeting of its foundation in 1848, the objects of the association were stated as:

"To maintain a Commercial Exchange; to promote uniformity in the customs and usages of merchants; to inculcate the principles of justice and equity in trade; to facilitate the speedy adjustment of business disputes; to acquire and to disseminate valuable and economic information; and generally to secure to its members the benefit of cooperation in the furtherance of their legitimate pursuits."[4]

At its outset, the exchange was created for the expressed purpose of organizing and standardizing transactions for grains. It also established an independent clearing house in 1925, the Board of Trade Clearing Corporation, to guarantee trades, a revolutionary concept at the time.

In 1865 the Chicago Board of Trade took steps to formalize grain trading by developing standardized agreements called futures contracts.

The price of a membership in the CBOT reached $62,500 in 1929, and that price was not seen again until 1973.[5]

In 1947, J. O. McClintock, who had previously served as president, assumed the role of executive vice president, marking the exchange's first instance of having a paid executive officer.[6] In the early days of the exchange, it operated at an annual budget deficit, which was made up by a member assessment. In 1948 operating income was $348,000, however expenses were $642,000 and the deficit of $294,000 was covered by a $175 per member assessment.

For years, the CBOT rightfully characterized itself as "the oldest and largest futures exchange in the world." It had a thriving grain and oilseed futures business that took off as other countries imported U.S. grain products in the 1970s, and it had created a number of benchmark financial products including U.S. Treasury bond futures and GNMA futures, among others. In addition, the first exchange-traded options exchange, the Chicago Board Options Exchange, launched in 1973, was the Chicago Board of Trade's brainchild.

As globalization of the futures business spawned new exchanges and as other exchanges introduced what became highly successful, high-volume products, CBOT could no longer make the claim of "largest," even in Chicago. The Chicago Mercantile Exchange, the CBOT's crosstown "rival," eclipsed CBOT's trading volume before the turn of the 21st century. After many years of speculation that the two exchanges would one day merge, they finally did. In October 2006, CME approached the then-publicly-traded CBOT with an offer to buy, which eventually was accepted by the CBOT board and shareholders. In July 2007, the merger was completed.

With the Federal Reserve Bank of Chicago on one side and the former Continental Bank on the other, the historic art deco Board of Trade Building stands at the foot of Chicago's financial district on LaSalle Street. That building, on which is etched "Chicago Board of Trade," continues to be used for trading, encasing all CME Group trading floor operations beginning in early 2008 as the CME's floor-traded legacy products moved off of the CME trading floor at 20 South Wacker Drive, Chicago. Given the strong move from the floor-traded model to electronic trading by CBOT and CME (more than 75 percent electronic in 2007), one trading floor accommodates what is left of floor-traded products. (See CME Group for more history.)

On June 2, 2008, it was announced that the CBOE and CME had, for $1 billion, settled a court case regarding who owns the CBOE, ending an almost two-year lawsuit that had prevented the CBOE from merging with another exchange or going public. The settlement provided full CBOT members with an 18 percent stake in the CBOE and $300 million in cash, terms worth roughly $1 billion with a $4 billion valuation of the options market. To qualify for the settlement, CBOT members had to have valid trading rights at the CBOE and own 10,251 shares of the CME Group. Rejected settlements ranged between $850 million and $1.3 billion.[7][8]


Annual Reports[edit]