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== History == Commodity-based money and commodity markets in a crude early form are believed to have originated in [[Sumer]] between 4500 BC and 4000 BC. Sumerians first used [[clay]] tokens sealed in a clay vessel, then [[Sumer#Mathematics|clay writing tablets]] to represent the amount—for example, the number of goats, to be delivered.<ref name=forbesindia16jan2013> {{cite web |title=Origins of Growing Money |first=Jasodhara |last=Banerjee |date=16 January 2013 |url=http://forbesindia.com/printcontent/34515 |publisher=Forbes India Magazine |location=India }}</ref><ref> {{cite SSRN |title=Risk Transfer Through Commodity Derivatives: A Study of Soyabean Oil |ssrn=1736406 |first1=Ram Pratap |last1=Sinha |first2=Ashis |last2=Bhuniya |date =7 January 2011 }}</ref> These promises of time and date of delivery resemble [[futures contract]]. Early civilizations variously used pigs, rare seashells, or other items as [[commodity money]]. Since that time traders have sought ways to simplify and standardize trade contracts.<ref name="books.google.com">{{cite book |last1=James |first1=Tom |title=Commodity Market Trading and Investment: A Practitioners Guide to the Markets (Global Financial Markets) |date=2016 |isbn=978-1137432803 |page=7 |publisher=Springer |url=https://books.google.com/books?id=IsQmDgAAQBAJ&q=At+first+the+precious+metals+were+valued+for+their+beauty+and+intrinsic+worth+and+were+associated+with+royalty&pg=PA7 |access-date=9 March 2020}}</ref><ref>{{Cite book|last=Diamond|first=Jared|title=Guns, Germs and Steel - The Fates of Human Societies|publisher=W. W. Norton & Company|year=2017|isbn=978-0393354324|location=New York and London}}</ref> [[Gold]] and [[silver]] markets evolved in classical civilizations. At first, the precious metals were valued for their beauty and intrinsic worth and were associated with royalty.<ref name="books.google.com"/> In time, they were used for trading and were exchanged for other goods and commodities, or for payments of labor.<ref>{{cite web| url = http://commodityhq.com/2012/a-brief-2000-year-history-of-silver-prices/| title = The Historical Value of Silver: A 2000-Year Overview}}</ref> Gold, measured out, then became money. Gold's scarcity, its unique density and the way it could be easily melted, shaped, and measured made it a natural trading asset.<ref>{{Cite web |url=http://www.onlygold.com/tutorialpages/historyfs.htm |title=History of gold |access-date=5 November 2013 |archive-url=https://web.archive.org/web/20131105122334/http://www.onlygold.com/tutorialpages/historyfs.htm |archive-date=5 November 2013 |url-status=dead }}</ref> Beginning in the late 10th century, commodity markets grew as a mechanism for allocating goods, labor, land and capital across Europe. Between the late 11th and the late 13th century, English urbanization, regional specialization, expanded and improved infrastructure, the increased use of coinage and the proliferation of markets and fairs were evidence of commercialization.<ref name=comarhistoryHolland2010>{{cite web |title=Medieval market institutions: The organisation of commodity markets in Holland, c. 1200 – c. 1450 |first=Jessica Elisabeth Catharina |last=Dijkman |date=18 June 2010 |url=http://igitur-archive.library.uu.nl/dissertations/2010-0621-200140/dijkman.pdf |archive-url=http://arquivo.pt/wayback/20160519232330/http://igitur%2Darchive.library.uu.nl/dissertations/2010%2D0621%2D200140/dijkman.pdf |url-status=dead |archive-date=19 May 2016 |pages=1–2 |access-date=20 April 2013 }}</ref> The spread of markets is illustrated by the 1466 installation of reliable scales in the villages of Sloten and Osdorp so villagers no longer had to travel to Haarlem or Amsterdam to weigh their locally produced cheese and butter.<ref name=comarhistoryHolland2010 /> The [[Amsterdam Stock Exchange]], often cited as the first stock exchange, originated as a market for the exchange of commodities. Early trading on the Amsterdam Stock Exchange often involved the use of very sophisticated contracts, including short sales, forward contracts, and options. "Trading took place at the Amsterdam Bourse, an open aired venue, which was created as a commodity exchange in 1530 and rebuilt in 1608. Commodity exchanges themselves were a relatively recent invention, existing in only a handful of cities."<ref name=Stringham>{{cite journal|last1=Stringham|first1=Edward|title=The Extralegal Development of Securities Trading in Seventeenth Century Amsterdam|journal=Quarterly Review of Economics and Finance|date=2003|volume=43|issue=2|page=321|ssrn=1676251|doi=10.1016/S1062-9769(02)00153-9|s2cid=153987773}}</ref> In 1864, in the United States, wheat, corn, cattle, and pigs were widely traded using standard instruments on the [[Chicago Board of Trade]] (CBOT), the world's oldest futures and options exchange. Other food commodities were added to the [[Commodity Exchange Act]] and traded through CBOT in the 1930s and 1940s, expanding the list from grains to include rice, mill feeds, butter, eggs, Irish potatoes and soybeans.<ref> {{cite web |url=https://www.cftc.gov/About/HistoryoftheCFTC/index.htm |publisher=U.S. Commodity Futures Trading Commission |title=History of the CFTC: U.S. Futures Trading and Regulation Before the Creation of the CFTC }}</ref> Successful commodity markets require broad consensus on product variations to make each commodity acceptable for trading, such as the purity of gold in bullion.<ref>{{cite web | url=http://www.goptions.com/commodities-trading-binary-options/ | title=Variations of commodities in trading | publisher=GOptions Trading | access-date=29 March 2016 | archive-date=13 April 2016 | archive-url=https://web.archive.org/web/20160413123112/http://www.goptions.com/commodities-trading-binary-options/ | url-status=dead }}</ref> Classical civilizations built complex global markets trading gold or silver for spices, cloth, wood and weapons, most of which had standards of quality and timeliness.<ref>{{cite book |last1=James |first1=Tom |title=Commodity Market Trading and Investment: A Practitioners Guide to the Markets (Global Financial Markets) |date=2016 |isbn=978-1137432803 |page=8 |publisher=Springer |url=https://books.google.com/books?id=IsQmDgAAQBAJ&q=At+first+the+precious+metals+were+valued+for+their+beauty+and+intrinsic+worth+and+were+associated+with+royalty&pg=PA7 |access-date=9 March 2020}}</ref> Through the 19th century "the exchanges became effective spokesmen for, and innovators of, improvements in transportation, warehousing, and financing, which paved the way to expanded interstate and international trade."<ref>{{cite book |title=US Commodity Futures Trading Handbook Volume 1 Strategic Information and Regulations |isbn=978-1577516095 |url={{google books|id=25kBkIfv2|p=23|plainurl=yes}} |date=29 May 2016 }}{{Dead link|date=December 2023 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> Reputation and clearing became central concerns, and states that could handle them most effectively developed powerful financial centers.<ref name="HistoryCFuturesMarkham1987"> {{cite book |title=The History of Commodity Futures Trading and Its Regulation |url=https://archive.org/details/historyofcommodi00mark |url-access=registration |first=Jerry W. |last=Markham |publisher=Praeger |year=1987 |page=[https://archive.org/details/historyofcommodi00mark/page/305 305] |isbn=9780275923136 }}</ref>
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