ECON 252 (2008) - Lecture 21 - Forwards and Futures

Lecture 21 - Forwards and Futures


Futures markets were started in Osaka, Japan in the 1600s to create an authoritative and meaningful market price for agricultural products, using standardized contracts. Since then, futures markets have been copied around the world to allow the hedging various future risks, financial and other. In the United States, the Chicago Mercantile Exchange and the Chicago Board of Trade have been the most popular futures trading markets. Although futures markets are changing and becoming more electronic, they are still important risk management tools for farmers and present financial opportunities for all manner of hedgers and arbitrageurs.



Fabozzi et al. Foundations of Financial Markets and Institutions, chapters 26 and 28 (pp. 565-573)

Working, Holbrook. "Futures Trading and Hedging." American Economic Review, June 1953, pp. 314-43.

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