| There are at least a dozen major
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| | contracts speculate on weather, anywhere
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| exchanges that serve as a marketplace for
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| | in the world, at different times of the
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| commodities worldwide. Each of these
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| | year.
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| specialize in certain commodities, while
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| | 3) New York Mercantile Exchange (NYMEX):
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| others trade in whole different set. The
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| | Moving out of Chicago to another
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| following is a brief history of these
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| | financial center New York, we have the
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| exchanges:
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| | NYMEX. This is one of the oldest
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| 1) Chicago Board of Trade (CBOT): This
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| | exchanges in the United States. It
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| commodity exchange was established in
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| | specializes in petroleum and metal
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| 1848. It trades in financial and
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| | products. Between these two specialties
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| agricultural contracts. Originally this
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| | there are a wide variety of options
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| exchange only traded agricultural
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| | available.
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| commodities such as corn, soybeans and
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| | 4) New York Board of Trade (NYBOT):
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| wheat. Now, it offers futures and options
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| | Sticking to New York City, we have the
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| contracts on a variety of products
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| | NYBOT. This was established as the first
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| including silver, gold, energy and U.S.
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| | commodity exchange in the country. It
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| Treasury bonds. In recent years, the CBOT
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| | trades cocoa, coffee, sugar, frozen
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| has added electronic trading features,
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| | orange juice, cotton as well as many
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| which is remarkably different from the
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| | other agricultural items. This particular
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| earlier open auction market. On 10/18
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| | exchange also trades currency pairs as
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| 2005, the Chicago Board of Trade offered
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| | well.
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| an initial public offering on the NYSE.
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| | 5) Others: Outside US there are a few
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| Its listed under the ticker symbol "BOT".
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| | major exchanges for commodities such as
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| 2) Chicago Mercantile Exchange (CME):
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| | LCE and TOCOM in London and Japan
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| Another one of the major exchanges is in
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| | respectively.
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| Chicago as well. This one, popularly
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| | As you can see, commodity exchanges are
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| known as CME, has been in business for
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| | very readily available all over the
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| over a hundred years. The main
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| | world. There are not only commodity
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| commodities traded here are live and
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| | exchanges that specialize in certain
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| feeder cattle, hogs, pork bellies,
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| | kinds of trades; there are ones that will
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| lumber, milk, butter and fertilizer. Now,
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| | trade in a wide variety of products as
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| it serves as a marketplace for stock
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| | well. These exchanges can trade in
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| index, interest rate, foreign exchange
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| | everything from the mundane, to the
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| and single-stock futures. One of the
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| | wacky. Hopefully this summary has piqued
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| fairly unique instruments being traded is
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| | your interest regarding the world of
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| the weather derivative. These future
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| | commodities trading.
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