Kansas City Board of Trade
Encyclopedia
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
futures
Futures exchange
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. These types of...
and options
Option (finance)
In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...
exchange
Exchange (organized market)
An exchange is a highly organized market where tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought.-Description:...
regulated by the Commodity Futures Trading Commission
Commodity Futures Trading Commission
The U.S. Commodity Futures Trading Commission is an independent agency of the United States government that regulates futures and option markets....
. Specializing in the hard-red winter wheat
Winter wheat
Winter wheat is a type of wheat that is planted from September to December in the Northern Hemisphere. Winter wheat sprouts before freezing occurs, then becomes dormant until the soil warms in the spring. Winter wheat needs a few weeks of cold before being able to flower, however persistent snow...
, it is located at 4800 Main Street in Kansas City
Kansas City, Missouri
Kansas City, Missouri is the largest city in the U.S. state of Missouri and is the anchor city of the Kansas City Metropolitan Area, the second largest metropolitan area in Missouri. It encompasses in parts of Jackson, Clay, Cass, and Platte counties...
, Missouri
Missouri
Missouri is a US state located in the Midwestern United States, bordered by Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas and Nebraska. With a 2010 population of 5,988,927, Missouri is the 18th most populous state in the nation and the fifth most populous in the Midwest. It...
.
History
The exchange was organized in 1856, shortly after Kansas City itself was incorporated in 1853, and served as the city's chamber of commerceChamber of commerce
A chamber of commerce is a form of business network, e.g., a local organization of businesses whose goal is to further the interests of businesses. Business owners in towns and cities form these local societies to advocate on behalf of the business community...
. It was formally chartered in 1876; among the exchange's founders was Edward H. Allen
Edward H. Allen
Edward Herrick Allen was a Republican Kansas City Mayor in 1867.Allen was born in Danbury, Connecticut and claimed a Mayflower ancestry...
.
It was originally located at 8th and Wyandotte Streets. In 1925, the exchange moved to 10th and Wyandotte Streets and in 1966, it moved to it's present location at 48th and Main Streets on the Country Club Plaza
Country Club Plaza
The Country Club Plaza is an upscale shopping district and residential neighborhood in Kansas City, Missouri, USA. It was the first shopping center in the world designed to accommodate shoppers arriving by automobile...
.
Operations
The primary products traded at the exchange are futures contracts on hard red winter wheat – the principal ingredient of bread – as well as options derivedDerivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
from these. Because of its nutritional value, the hard red winter wheat usually trades at a premium to the Chicago Board of Trade
Chicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
's soft red winter wheat. The exchange facilitates the transfer of ownership of the futures and options contracts through the open outcry
Open outcry
Open outcry is the name of a method of communication between professionals on a stock exchange or futures exchange. It involves shouting and the use of hand signals to transfer information primarily about buy and sell orders...
system.
In 1982, the exchange introduced Value Line
Value Line
Value Line is an independent investment research and financial publishing firm based in New York, New York, USA, founded in 1931 by Arnold Bernhard. Value Line is best known for publishing The Value Line Investment Survey, a stock analysis newsletter that is updated weekly and kept by subscribers...
futures, making it the first exchange offering a stock index
Stock market index
A stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used as benchmarks, to measure the performance of portfolios such as mutual funds....
futures contract
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
. Options on Value Line futures were introduced in 1992. As of December 12, 2004, the Value Line futures began traded solely through an electronic-trading
Electronic trading
Electronic trading, sometimes called etrading, is a method of trading securities , foreign exchange or financial derivatives electronically...
platform. Value line futures have since been de-listed.
Tours
Tours, available by appointment on trading-day mornings, enable visitors to learn about commodities futures and to watch trading activity from the gallery.See also
- List of futures exchanges
- List of traded commodities
- Value Line Composite IndexValue Line Composite IndexThe Value Line Composite Index is composed of all of the companies that are included in the Value Line Investment Survey.There are currently 1,626 companies included in the index that are publicly listed on the following exchanges:...
, traded on the futures market at the Kansas City Board of Trade