Kansas City Board Of Trade
The Kansas City Board of Trade (KCBT) is a place where buyers and sellers gather to trade their commodities. That KCBT they get together to buy and sell hard red winter wheat, the Value Line Index, natural gas, and the ISDEX Internet stock index. Future and options contracts can be lock into a purchase price or sale price in advance, which lowers the risk of volatile prices. This is known as hedging. Future contracts are agreement between a buyer and seller to deliver a product for a certain date in the future. When these contracts are made the price, quantity, and delivery date have already been preset. In option contracts he gives the buyer or the seller to take hold of the product in the future, but isn’t required. In dealing with option contracts you have to look at a few words, in order to understand what going on. First you have “put”, which gives you a chance to take short futures position of product, so you don’t worry about downward price mo
vement. Second you have “call”, which gives you a chance to take long futures position of product, so you don’t worry about upward price movement. Either way, businesses use option contracts as insurance to protect the bottom line. Just like anything else the prices of these contracts are determined by supply and demand. If you have more buyers then sellers, the price goes up. If you have more sellers than buyers, the price goes down. Not really being interested in economics, I found it very interesting. I don’t think that it’s something that I could on daily bases. It seems like the stress level in the pit is ten times higher then anything I’ve seen. When you think of Kansas City you don’t think of it being one of the top 5 trading places in the world. It was nice to learn some new history on Kansas City, and that we are providing the United States with food they eat, and the heat of natural gas. Sitting in the visitors gallery watching the “state of intense
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Approximate Word count = 670
Approximate Pages = 3 (250 words per page double spaced)
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