UK Accounting Glossary
The Chicago Board of Trade (CBOT) is a commodities exchange located in Chicago, IL, and one of the busiest institutions of its kind in the world. Thousands of members trade futures and options on the Chicago Board of Trade (e.g. U.S. Treasuries, grains, livestock, precious metals, etc.). In 1848, a group of local business leaders founded the Chicago Board of Trade in an attempt to smooth out the boom and bust cycle of grain prices. Through the 19th century, the Chicago Board of Trade grew in importance to the city’s and region’s economy. However, throughout its growth, the Chicago Board of Trade also had difficulty preventing market manipulation, particularly by traders who tried to “corner” the market in various commodities. The Grain Futures Act of 1922 and the Commodity Exchange Act in 1936 imposed regulations on the Chicago Board of Trade aimed at curtailing these activities. Trading of financial instruments on the Chicago Board of Trade began in the 1970s. In 1973 the Chicago Board of Trade established the Chicago Board Options Exchange (CBOE), a sister entity. By the 1990s, the Chicago Board of Trade was facing increased competition from more efficient electronic exchanges. This prompted the Chicago Board of Trade to initiate efforts toward implementing electronic trading in 2001. In 2006 the Chicago Mercantile Exchange announced plans to buy out the Chicago Board of Trade, and in 2007 the exchanges merged to form CME Group.
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This glossary post was last updated: 4th February 2020.