[brendalee2]

Can someone please explain to me what are the main difference between the chicago board of trade, the chicago mercantile exchange, the chicago stock exchange and the chicago options exchange? What are futures? Thanks in advance...

[CaptainForest]

The following information is from http://www.investopedia.com/

Chicago Board Of Trade - CBOT
A commodity exchange established in 1848 that today trades in both agricultural and financial contracts. The CBOT originally traded only agricultural commodities such as wheat, corn and soybeans. Now, the CBOT offers options and futures contracts on a wide range of products including gold, silver, U.S. Treasury bonds and energy.

The CBOT has added electronic trading of futures contracts in recent years, but for decades was an open auction market, where traders meet in a trading pit and primarily use hand signals to execute trades.

On October 18th, 2005, the Chicago Board of Trade transformed from a non-profit organization to a for-profit organization with an initial public offering on the NYSE, listed as CBOT Holdings Inc. Its ticker symbol is "BOT".


Chicago Mercantile Exchange - CME
The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and a small amount on agricultural products.

Founded in 1898 as a not-for-profit corporation, the CME was called the Chicago Butter and Egg Board until 1919. In November 2000, CME became the first U.S. financial exchange to demutualize and become a shareholder-owned corporation.

The trading of futures and options on futures provides a way to protect against and profit from price changes in financial instruments and physical commodities.


Futures Contract
A contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash.

The terms "futures contract" and "futures" refer to essentially the same thing. For example, you might hear somebody say they bought "oil futures", which means the same thing as "oil futures contract". If you want to get really specific, you could say that a futures contract refers only to the specific characteristics of the underlying asset, while "futures" is more general and can also refer to the overall market as in: "He's a futures trader."