| Made in Chicago: The Futures Market |
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An unforeseen side effect of the Chicago Board of Trade's new grading standards -- and the spread of the telegraph -- was the emergence of a "futures market" in the 1850s. Feeling newly confident about trading commodities represented as scraps of paper, speculators near and far entered the market simply to gamble. In a dealing frenzy, and with no intent of ever taking delivery of their purchases, they bought and sold contracts for grain to be delivered in the future, based on their predictions for the rise or fall of the commodity's price.
During the Civil War, the Union Army's demand for provisions created a futures market in pork and oats, as well as wheat. Today, the Chicago Board of Trade and the Chicago Mercantile Exchange oversee futures trading in dozens of agricultural and other commodities.
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