Though the origins of futures trading can be supposedly traced to Ancient Greek or Phoenician times, the history of modern futures trading begins in Chicago, United States in the early 1800s. Chicago is located at the base of the Great Lakes, close to the farmlands and cattle country of the U.S. Midwest, making it a natural center for transportation, distribution and trading of agricultural produce. Gluts and shortages of these products caused chaotic fluctuations in price. This led to the development of a market enabling grain merchants, processors, and agriculture companies to trade in "to arrive" or "cash forward" contracts to insulate them from the risk of adverse price change and enable them to hedge.

Informative histories can be found on:

The Chicago Mercantile Exchange web site at: http://www.cme.com/edu/res/intro/futrhist9696.html.

The Chicago Board of Trade web site at: http://www.cbt.com/cbot/pub/page/0,3181,942,00.html.

Futures Industry Association at: http://www.futuresindustry.org/fi-magazine-home.asp?a=607