A Short History of Futures Trading

Scarcity of resources, especially those that supply the basic needs of men and women, led humanity to a lot of technological advances such as agriculture and domestication of animals, refrigeration, mass production, and even the discovery and invention of artificial alternative products. The same scarcity had led humanity to master the art and science of speculation where prices, supply, and demand in the future became the business of today. It is this speculation that brought into existence futures trading. This economic survival strategy gives all parties involved the following assurances:

The seller, regardless of the demand in a future date, is assured that the buyer will purchase the commodities.
The buyer, regardless of the supply in a future date, is assured that the seller will sell the commodities.
The futures on their own could be sold in an open or exchange market and are very liquid thus even when one does not want to physically purchase the products he could buy and sell the security for profits.

The Common Underlying Commodities

Historically and up to the present, the most commonly speculated commodities of are the following:

Oil and natural gas because there is a continuing increase in their demand, and in spite of the increased level of supply production, there is no assurance that they will suffice the need and above all they cannot be replenished.
Gold, silver, and other minerals and gemstones that are used in the production of jewelry.
Cattle, pork bellies, and other farm products.
Corn, soybeans, rice, coffee, and soft commodities in general.

Historical Perks to Take Note Of

Archaeologists all over the world found proofs that futures trading though not as sophisticated as they are right now took place as early as the time of King Nebuchadnezzar. They found tokens in the shapes of livestock such as goats, cattle, chickens, and sheep sealed in jars of clay where there are markings of promised and actual dates of delivery. Other interesting facts about them are:

The early civilizations of Rome, which had gold currency, entered into agreements of future exchanges with Lebanon that had lumber, with the Chinese for silk and goods made of leather, and with other Asian countries for spices.
Approximately six thousand years ago, Chinese traders used rice tickets in order to raise cash in exchange of the promise to sell a specific amount of rice on a certain future date.
The Knights of Templar, who were very powerful and wealthy during the thirteenth century up to the fifteenth century served as go-betweens of European traders who purely relied on the former's trustworthiness that they would deliver on a future time that was specifically agreed upon in terms of quantity and quality.
In the nineteenth century, the United States of America started to practice and regulate futures trading, and their most common underlying goods were corn, cotton, coffee, cocoa, sugar, and wheat.
In the 1970s, currencies such as those of Japan and Switzerland, treasury bills and bonds, and shares of stocks became strong and favorite underlying assets of futures.