It seems the fixing scandal has come to commodities. Before we all get lost in the jargon filled world of straddles and assayers, it might be worth brushing up on the some of the less well known facts about the market.
1) Sweet as candy
The New York Mercantile Exchange's first home was a little room in a steam sweet and sugar refinery on the corner of Greenwich and Chambers Streets, in what is currently known as Manhattan's West Village.
Contracts exchanged on Nymex have included propane, plywood, silver coins, pieces of fruit, eggs, foreign made solidified crisp boneless meat and solidified dressed turkeys.
Nymex was purchased by CME Group in 2008.
2) The philosopher and the olive presses
Choices were initially specified by the Greek logician Aristotle in his book "Legislative issues", composed around 350 BC, or 2334 prior years Libor.
Aristotle recounts the story of one of the seven sages of old Greece, Thales of Miletus. "Thales, so the story goes, in view of his destitution was insulted with the futility of theory," says Aristotle in Politics.
Anyhow by settling products markets taking a gander at the stars and the climate, Thales anticipated a colossal guard crop for olives the accompanying year. Eureka! He understood that an expansive harvest of olives would have prompted a solid interest for olive presses.
Owning all the presses would have been perfect, however Thales was a savant and didn't have any cash to purchase them. Rather, he chose to utilize a littler measure of cash as stores to secure utilization of the majority of the olive presses. It was basically a call choice on the presses.
At the point when the plentiful harvest he had anticipated that arrived everyone needed will utilize the presses and Thales sold out the right to utilize them. He profited, "so demonstrating that it is simple for rationalists to be rich on the off chance that they pick, yet this is not what they think about," peruses Aristotle's Politics.
3) Samurai trading
While alternatives have old roots, the first thing trade goes again to seventeenth century Japan.
Individuals. Old Japan. pic: around 1900. Four Samurai warriors in their conventional costumes.at the time the samurai were paid in rice, which they then needed to trade for coins through rice businesses or cash changers. Perhaps their compensation council was exhorted by Credit Suisse.
Naturally, the samurai needed to have stronger control on the rice markets. Making a formal business implied the samurai could profit. So together with rice handles the samurai dispatched the Dojima Rice Exchange in 1697.
The trade was broken up after 242 years.
4) Blessed by the Gods
A 31 foot, six ton aluminium statue of Ceres, the Roman Goddess of grain harvest, best the Chicago Board of Trade building. Introduced in 1930, it would be worth around $63,900 in the event that you liquefied it down. It was made by John Storr, a stone worker from Chicago who happened to be an understudy of renowned French craftsman Auguste Rodin.
5) OIL, DOLR and ZEN
Floor dealers at the New York Mercantile trade frequently know one another by the yellow or green identifications that show floor names, as opposed to their given name. Floor names are alpha codes made up of three or four letters. These incorporate OIL, OPEC, DOLR, ZEN.
This originates from when a large portion of the exchanging occurred on the floor and distinguishing individuals by an one of a kind acronym was speedier and less demanding than calling them by their given name or organization. That would never happen today.
6) Hearing skills
Until business sector costs were posted electronically, writing slates were utilized at Nymex to show the data. The assistants, known as "load up young men", figured out how to perceive dealers by their voices in light of the fact that they didn't have room schedule-wise to turn around and see who was getting out the requests.
7) Day one on Comex
The six wares accessible for exchanging on Commodity Exchange, Inc (Comex) on its opening day in 1933 were copper, shrouds, elastic, silk, silver and tin.
Comex is currently piece of CME Group and is known for its valuable metal contracts. Of those six products, just silver and copper can now be exchanged. Which is a disgrace on the grounds that I wager you could make a mean arbitrage exchange utilizing shroud choices and climate subsidiaries.
8) Walk of shame
Back in the days when smoking was permitted in many spots, an enormous ashtray used to sit amidst the ring at the London Metal Exchange.
Brokers were just permitted to smoke amid one exchanging session toward the evening, however since they needed to stay in contact with the merchant couch, they were compelled to flick the cigarette barges in on the ashtray.
Missing the ashtray included a humiliating stroll of disgrace to recover the butt one the session was over.
9) Delivery? No thanks.
It is well realized that numerous products contracts are physically deliverable, implying that when they lapse you can really get live bovines or bushels of corn. It is less well realized that conveyance happens just in under 2% of all farming contracts exchanged on the CME. Furthermore clearly even brokers take conveyance by misstep.
10) Hollywood loves commodities trading
During the time the CME's exchanging floors have been emphasized in numerous hit movies, including: two Batman motion pictures – Batman Begins and The Dark Knight featuring Christian Bale; Transformers: Dark of the Moon; Ferris Bueller's Day Off with a shockingly adolescent Matthew Broderick; and Jungle 2 Jungle featuring Tim Allen.
Gracious yes, and the famous Trading Places in which Eddie Murphy's character, Billy Ray Valentine, gets educated on products exchanging by the Duke Brother
