Which contract is bought and sold on the Chicago Board of Trade?

Which contract is bought and sold on the Chicago Board of Trade?

• A. Cotton futures contracts
• B. Corn futures contracts
• C. Wheat futures contracts
• D. Rice futures contracts

Answer: (B)

Futures contracts are standardized agreements to buy or sell a specific amount of a commodity at a fixed price on a given future date, and they are bought and sold on organized exchanges like the Chicago Board of Trade. The Chicago Board of Trade has a long history as a home for agricultural futures, with corn futures standing out as a flagship contract because corn is a staple in livestock feed and many industries, which creates high trading volume and strong liquidity. The contract is standardized—size, delivery month, quality, and delivery location—so buyers and sellers can manage price risk with confidence and know exactly what will be delivered and when. Because of this strong association and the heavy use of corn futures for hedging and price discovery on that exchange, corn futures are the best answer. Other commodities listed are futures contracts as well, but they aren’t the contract most closely linked, on the Chicago Board of Trade, in this common framing.

Futures contracts are standardized agreements to buy or sell a specific amount of a commodity at a fixed price on a given future date, and they are bought and sold on organized exchanges like the Chicago Board of Trade. The Chicago Board of Trade has a long history as a home for agricultural futures, with corn futures standing out as a flagship contract because corn is a staple in livestock feed and many industries, which creates high trading volume and strong liquidity. The contract is standardized—size, delivery month, quality, and delivery location—so buyers and sellers can manage price risk with confidence and know exactly what will be delivered and when. Because of this strong association and the heavy use of corn futures for hedging and price discovery on that exchange, corn futures are the best answer. Other commodities listed are futures contracts as well, but they aren’t the contract most closely linked, on the Chicago Board of Trade, in this common framing.