I’m Steve Ember with the VOA Special English Agriculture
Report.
The Chicago Board of Trade is one of the largest exchanges for
futures trading, and one of the oldest. It opened in 1848.
A futures contract is an agreement on a price and a date to buy or sell goods
in the future. Agricultural futures have long been a way to limit risk with crop
prices. Futures trading can help protect against losses. Companies also buy
futures to guarantee costs for materials.
At the Chicago Board of Trade, or CBOT, futures have
always been traded using the open outcry
system. Floor brokers bring together buy orders with sell orders
in an area called the pit.
Brokers shout and wave their hands. The system looks disorganized. But in
fact it is part of an orderly market. Hand signals identify buyers and sellers
and show how many contracts will be traded.
The open outcry system will continue. But starting August first, the Chicago
Board of Trade will begin using a new electronic system at the same time. This
system is called ecbot.
Now traders will be able to trade futures in corn, wheat, soybeans, soybean
oil, soybean meal and rough rice by computer. The use of two systems is similar
to the hybrid market at the New York Stock Exchange. Trading takes place both on
a physical trading floor and electronically.
CBOT says its new electronic trading system will help it expand
internationally. Last year, the Board of Trade began to offer contracts for
Brazilian soybeans. This meant that contracts to receive a shipment of soybeans
could be traded among buyers both inside and outside the United States.
Futures trading can get highly complex. But farmers commonly use futures as a
way to protect against low crop prices. The crop is still sold at harvest time.
Market forces still set prices. But, before the crop is ever harvested, a farmer
can buy a contract giving the right to sell an amount of the crop at a set
price.
Futures guarantee prices for goods. Yet, in futures trading, real shipments
of goods rarely take place. In fact, CBOT says only about four percent of
contracts result in any products being sent to a buyer.
A futures market could not operate without speculators. Speculators are
investors who purposely take risks trying to guess which direction prices will
go.
This VOA Special English Agriculture Report was written
by Mario Ritter. Read and listen to our reports at voaspecialenglish.com. I'm
Steve Ember.
futures contract :
期貨交易合同
outcry
: 大聲疾呼;叫賣