Chicago Board of Trade
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This article gives the details of the beginning of the Chicago Board of Trade in Chicago. It describes why Chicago's location was so good and the reason the exchange was needed.
The Chicago Board of Trade was founded in 1848. At that time agricultural trading was very chaotic. There was a lack of long-term grain storage and with each season, there were "wild seasonal fluctuations" in the supply and the demand of wheat and corn.
The reason the Board of Trade was located in Chicago was because of Chicago's strategic location. Being at the base of the Great Lakes was an advantage because it was close to the farmlands of the Midwest. This made Chicago grow quickly to become a grain terminal.
Because of the unpredictable market conditions of supply and demand ( it was very difficult for the farmers to make a profit from their crops at this time) and also problems with transportation and storage, a group of men decided that something needed to be done. The decision was to create a futures market...