e-CBOT

The e-CBOT is an electronic trading platform for trading futures and options contracts on the Chicago Board of Trade (CBOT). Traders may use the e-CBOT system to trade metals, agricultural, and financial products, including flour, corn, rice, hay, soybeans, wheat, silver, gold, and ethanol. Financial derivatives such as emission allowances, interest rate swaps and futures, and Dow Jones index futures and options on futures are also available for trade.

The more modern, electronic trading platform, e-CBOT, has nearly replaced the original open outcry method used to match buyers and sellers. Most daily contracts now traded via this automated system, where traders and dealers buy and sell contracts by bidding or offering a price and a quantity for the contracts. 

The e-CBOT facilitates the futures market, giving its participants, known as hedgers, a way to manage risk. The hedgers buy or sell commodity contracts to protect against the possibility of future unfavorable price changes in corn or wheat, for example. Typically those who hedge the market are users of the underlying commodity.

Speculators participate in the market as well. The difference with speculators is that they merely bet on which way they think prices are going to go. They have no interest in holding the physical asset they are trading. However, their participation is particularly important because they bring liquidity to the market.

For most of the Chicago Board of Trade's (CBOT’s) history, which dates to April 3, 1948, trading took place via open outcry in one of the exchange's octagonal trading pits. During open outcry, the traders in the pit announce the number of contracts they want to buy, or to sell, and the price they want to pay, or to receive, for that asset. 

These traders signal, using their fingers, to denote the quantity of contracts, the price, and other information. If a trader’s palm faces out, it is an attempt to sell contracts. It is a buy signal when the trader’s palm faces in. 

For example, a trader who wants to buy ten contracts at a price of eight would call out "eight-for-ten," stating the price before quantity. The trader would turn a palm inward toward their face and put an index finger to the forehead to indicate 10-contract quantity. If a trader wanted to buy one contract, they would put an index finger to the chin. 

If the trader wanted to sell five contracts at a price of eight, the trader would call out "five-at-eight," noting quantity before price. In this scenario, the trader would show a palm facing outward and hold up five fingers.

Trade via open outcry is from 7:20 a.m. to 3:15 p.m. Monday through Friday, which is limited compared to the e-CBOT’s 22-hour trading day.