Sunday, December 06, 2009

Kansas City Board of Trade

On Friday, I took a field trip to the Kansas City Board of Trade where they trade Hard Red Winter wheat commodities. This is the image you get when you think of the stock market and see people in a pit on TV waving hands frantically trying to buy or sell. This is a hub of trade for a large quantity of wheat trading that occurs in the United States. There are a few other trading exchanges for wheat as well, but this is a major one.

The majority of trading is done electronically via computer these days but there is still some that happens in person. As trades are executed, they're recorded and the price of wheat changes as a result whether up or down. The electronic boards in the background track the prices of wheat that is scheduled for delivery during various time frames. Some traders are just trying to make a margin on trades or speculation and some are hedging risk so that they get a guaranteed rate to buy or sell at. It was very interesting to see the market in person. The last 30 seconds close of the market was fairly rapid and exciting as well.

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