Chicago futures trading diverged from material reality from its very beginnings

Evidence

In those early days of speculative fever, brokers could see and smell the goods (underlying assets) whose prices they were speculating on. Yet even during that time, traders were selling wheat that had not yet been grown, livestock that had not yet been (and likely never would be) produced. No material commodities were exchanging hands in what were essentially “fictitious dealings.” The distance between the world of trading and the realities of agriculture and farming was growing fast in the pits. — Aris Komporozos-Athanasiou, Speculative Communities, 86

Categorization

• XREF: Connects to the book’s core theme of speculation shaping social imagination — trading as fiction detached from material goods. Also resonates with We (Zamyatin) and White Noise’s abstraction themes. — connects to: The skew’s persistence after 1987 undermines the discovery narrative of option pricing — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1163; Option market prices initially diverged from the Black-Scholes model but converged — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 735; Cash-settled index futures were barred by legal logic until decades into the century — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 58

Broader Connections

• Option market prices initially diverged from the Black-Scholes model but converged #corroborates (0.90) — Donald MacKenzie, An Engine, Not a Camera, 735
• The skew’s persistence after 1987 undermines the discovery narrative of option pricing #expands (0.80) — Donald MacKenzie, An Engine, Not a Camera, 1163
• Cash-settled index futures were barred by legal logic until decades into the century #complicates (0.75) — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 58