Futures trading have begun taking place even during the 17th or 18th century.
It was believed to have originated from Japan and Holland where agricultural products such as paddy wheat and rice were involved.
However, according to historical records, the first systematic trading was done in 1840 in Chicago, United States.
The first centralized trading market was also being constructed in Chicago.
It was named the Board of Trade of the Chicago City and later modified to be Chicago Mercantile Exchange (CME).
The products involved in the futures trade have been expanded during the 19th century where live stocks and meats have been available apart from the conventional wheat and rice.
They are often traded within the boundary of US, usually from the western lands to the eastern grounds with higher populace.
Later on, the gamut of products encompassed crude oil, heating gas, gold and silver.
And due to the globalization of the world, the stock index and futures have become available for trading as well.
The CME announced the introduction of financial futures into the futures trading in 1971, in conjunction with the ending of currency gold standards.
Since then, it has become the most traded items and in the year 1987, futures contracts have permitted wide availability to everyone across the world.
They have fixed contract specifications, including the price and delivery schedule of the product.
The names futures contracts and forward contracts may bring a relatively similar meaning as they are used closely to each other, but they have different trading system.
Forward contracts are done over the counter via the interaction between a broker and a dealer but the futures contracts involve future trading through the open outcry.
It could either be done via the centralized futures markets or merely in the public domain.
However, it is different from options as it is compulsory for holders to deliver or purchase the underlying product upon the complete of the contract period.
It was believed to have originated from Japan and Holland where agricultural products such as paddy wheat and rice were involved.
However, according to historical records, the first systematic trading was done in 1840 in Chicago, United States.
The first centralized trading market was also being constructed in Chicago.
It was named the Board of Trade of the Chicago City and later modified to be Chicago Mercantile Exchange (CME).
The products involved in the futures trade have been expanded during the 19th century where live stocks and meats have been available apart from the conventional wheat and rice.
They are often traded within the boundary of US, usually from the western lands to the eastern grounds with higher populace.
Later on, the gamut of products encompassed crude oil, heating gas, gold and silver.
And due to the globalization of the world, the stock index and futures have become available for trading as well.
The CME announced the introduction of financial futures into the futures trading in 1971, in conjunction with the ending of currency gold standards.
Since then, it has become the most traded items and in the year 1987, futures contracts have permitted wide availability to everyone across the world.
They have fixed contract specifications, including the price and delivery schedule of the product.
The names futures contracts and forward contracts may bring a relatively similar meaning as they are used closely to each other, but they have different trading system.
Forward contracts are done over the counter via the interaction between a broker and a dealer but the futures contracts involve future trading through the open outcry.
It could either be done via the centralized futures markets or merely in the public domain.
However, it is different from options as it is compulsory for holders to deliver or purchase the underlying product upon the complete of the contract period.