Futures trading achieved unprecedented scale in nineteenth-century Chicago.

Evidence

Markets’ infrastructures matter. Consider, for example, the market in “futures” on agricultural products such as grain, which is relevant to this book because it was from agricultural futures markets the Chicago Mercantile Exchange and Board of Trade that the first of today’s financial derivatives exchanges emerged. A “future” is a standardized, exchange-traded contract in which one party undertakes to sell, and the other to buy, a set quantity of a given type of asset at a set price at a set future time. Futures markets did not originate in the United States. What seem to have been in effect rice futures were traded in eighteenth-century Osaka (Schaede 1989), and some European markets also predated those of the United States (Cronon 1991, p. 418). But futures trading developed in Chicago on an unprecedented scale in the second half of the nineteenth century, and it is the subject of a justly celebrated analysis by the historian William Cronon (1991). — Donald MacKenzie, An Engine, Not a Camera, 68

Categorization

• DEFINE: Defines what a futures contract is: a standardized exchange-traded agreement to buy or sell a set quantity at a set price and future time.
• XREF: connects to: Formal futures markets in the late nineteenth century upended the industrial social contract.; Physical delivery once legally distinguished futures trading from gambling. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 761; Modern speculative communities trace to the 1860s-70s founding of formal futures markets. — Aris Komporozos-Athanasiou, Speculative Communities: Living with…, 165

Broader Connections

• Formal futures markets in the late nineteenth century upended the industrial social contract. #expands (0.78)
• Physical delivery once legally distinguished futures trading from gambling. #expands (0.75) — Donald MacKenzie, An Engine, Not a Camera, 761