Fun thread: commodities trading dates back to the Samaritans.. somewhere between 4500 and 4000 BCE
Modern futures markets started in England in the 16th century (huge gap in time)
Then in 1848 the modern day futures market that you know now..started in Chicago
Its started with wheat..so farmers and dealers could meet at a central place...this soon expended to other commodities
This marketplace exploded! A place where farmers could forward sell to lock in prices in case of adverse conditions...the birth of the modern day hedge
For instance, the farmer would agree with the dealer on a price to deliver to him 5,000 bushels of wheat at the end of June. The bargain suited both parties. The farmer knew how much he would be paid for his wheat, and the dealer knew his costs
Today the exchange has morphed into a speculators playground ...but we should not forget the reason the futures markets were created for, because these principles hold true today. END
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