How Did the Commodities Market Begin?

If you are considering making an investment in the commodities market it makes sense to find out as much as you can about it first. This can lead you to make a better investment than you would otherwise. In addition to this there is the opportunity to learn how the market began – and it might actually go back a lot further than you think.

Before the days of money

While we are used to using coins and banknotes by way of making payment nowadays, there was a time when money didn’t exist. Ancient times saw people using commodities to make deals with each other. Sometimes a token would be made in clay that would feature the number of animals a person would agree to trade with another. While this is far removed from the way the commodities markets are run today, the principle is very much the same. Many people would be surprised to see how many hundreds of years’ back the history goes.

The modern commodities market

Of course the commodities market in the present day is a totally different thing. Nowadays it must be properly regulated to ensure the deals are fair for everyone. Indeed this was one of the reasons why the first proper commodities market was created in 1849.

You may recognize the name of this market, since it is the Chicago Board of Trade. This was not only the first market of its kind it is also one of the most successful of its kind today. Nowadays it is part of the CME Group, which is comprised of the Chicago Board of Trade and the Chicago Mercantile Exchange.

How the commodities market has changed over the years

There is no doubt the creation of the Chicago Board of Trade in 1949 made a big difference to things. More regulations have been put in place since that time to make sure the market is protected and that trades can only be made in a certain way.

Typical examples include The Commodities Exchange Act, which came into being in 1936, and the Futures Trading Act, which came into force several decades later in 1982. The good news is that all these acts and rules mean it is easier to know what to expect when you delve into the commodities market.

In a similar fashion we can no doubt expect this marketplace to change even more in the future. Nothing ever stays the same for too long in this sense, and this goes for commodities too. We will always need commodities and lots of people like to invest in them because they can provide a more consistent profit than you might get in regular stocks and shares.

But regardless of whether you decide to invest in them or not, you will see how fascinating it is to look back into history and explore what commodities meant in the past. Things may have changed in many ways, but the principle is still there.