What is the 'New York Board of Trade (NYBOT)'

The New York Board of Trade (NYBOT) was a commodity futures exchange which traded futures contracts and options on futures for physical commodities such as sugar, cotton, coffee, cocoa and orange juice. The exchange also traded financial and index contracts based on stock market indices, currencies, and interest rates.

BREAKING DOWN 'New York Board of Trade (NYBOT)'

​​​​​​​The New York Board Of Trade (NYBOT) exchange was originally founded as the New York Cotton Exchange in 1870. In 1997, they acquired the Coffee, Sugar and Cocoa Exchange (CSCE). The CSCE also dates back to the 19th century, founded in 1882 as the Coffee Exchange of New York.

In 2004, the two exchanges merged under a new name, The New York Board of Trade. Just three years later, the NYBOT was acquired by the Intercontinental Exchange (ICE).

Early Exchanges Enable Trading in Futures 

The roots of the NTBOT and N.Y. Cotton Exchange illustrate how futures contracts have evolved to become the sophisticated hedging tools used by financial professionals today. The emergence of exchanges allows for easier trading of contracts in basic commodities.

When the New York Board Of Trade was still The Cotton Exchange, it facilitated trading in cotton futures. Cotton is extensively used to manufacture clothing, linens, and other related products before the use of synthetic fibers. Because cotton is an agricultural commodity, its price could be subject to volatile changes. These changing prices made it difficult for manufacturers to price their goods. As far back as the early 19th century, futures markets began to operate and exchanges were formed to standardize contract terms.

Standardized cotton futures allowed manufacturers to buy at a predetermined price for future delivery, months or years later. So, regardless of how the spot price of cotton might fluctuate, manufacturers could be more certain of the cost of their raw materials. Futures also helped the producers of cotton by guaranteeing a price for cotton the farm would deliver in the future. A standard cotton futures deal would specify the amount of cotton to be delivered and its quality.

Similarly, the Coffee, Sugar and Cocoa Exchange (CSCE) traded agricultural futures contracts. The exchange had its roots in the Coffee Exchange, which was established in 1882. The Coffee Exchange added trading in sugar in 1914 and merged with the Cocoa Exchange in 1979.

Other exchanges, located mostly in New York and Chicago, traded in futures for grains, hides, butter, eggs, livestock, and metals.

NYBOT Morphs Into a Global Electronic Exchange

For more than a century, contracts would trade on exchange floors in the pits with open outcry. However, as communications and computer technology improved, more trades were executed over electronic communication networks (ECNs).

A few years after the Intercontinental Exchange acquired the NYBOT, exchange floors were closed so that all trades would be executed electronically. ICE operates completely as an electronic exchange and is linked directly to individuals and companies looking to trade in oil, natural gas, jet fuel, emissions, electric power, commodity derivatives, and futures.

  1. Coffee, Sugar and Cocoa Exchange ...

    The Coffee, Sugar and Cocoa Exchange (CS&CE) was a commodities ...
  2. New York Futures Exchange (NYFE)

    The New York Futures Exchange (NYFE) was founded in 1980 to trade ...
  3. Futures Market

    An auction market in which participants buy and sell commodity/future ...
  4. Regional Stock Exchange

    A regional stock exchange is a place outside of a country's primary ...
  5. Cash Price

    The cash price is the actual amount of money that is exchanged ...
  6. Winnipeg Commodities Exchange (WCE)

    The Winnipeg Commodities Exchange (WCE) was Canada's only agricultural ...
Related Articles
  1. Trading

    Sugar and Cotton ETF Trade Setups (SGG, BAL)

    Sugar and cotton ETFs are setting up for another move to the upside amidst a longer-term uptrend.
  2. Investing

    4 Commodities Affected By World Conflicts

    What happens to commodities when political disagreements lead to war?
  3. Investing

    The Perks of Trading Coffee Options

    As more people begin to trade coffee, we explain how coffee options work, who uses them, what drives valuations, and the risks and rewards.
  4. Investing

    Who Owns The Stock Exchanges?

    As M&A heats up among the exchanges, here's how the market currently looks.
  5. Insights

    Is Your Stock Headed South?

    Don't let your portfolio go with it! Find out which signs to watch out for.
  6. Investing

    4 Reasons Investors Love Intercontinental Exchange (ICE)

    Read about Intercontinental Exchange and the strong economic position the firm achieved through a series of acquisitions and positive derivative market trends.
  7. Investing

    Commodities That Move The Markets

    Find out how the everyday items you use can affect your investments.
  8. Insights

    Monsanto’s India Problem (MON, BAYN.DE)

    Monsanto has to negotiate its terms with countries not fully sold on intellectual property rights when it comes to GMO seeds.
  9. Trading

    Beginner's Guide To Trading Futures

    An in-depth look into what futures are, and how you can build a solid base to begin trading them.
  1. What is the history of futures?

    Explore the history of futures trading and the origin of the major commodity futures trading exchanges in England and the ... Read Answer >>
  2. What types of futures contracts are typically sold on an exchange?

    Explore the wide variety of available futures contracts traded on exchanges, which range from agricultural commodities to ... Read Answer >>
  3. How can electricity be traded as a commodity by an individual investor?

    Learn the characteristics unique to electricity trading as a commodity and how investors can trade electricity futures on ... Read Answer >>
  4. What are all of the securities markets in the U.S.A?

    Learn about the major and somewhat lesser-known U.S. financial securities markets. Read Answer >>
  5. What's the difference between a commodity and a product?

    Understand the difference between commodities and products, and learn how they are connected to each other and to market ... Read Answer >>
Hot Definitions
  1. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  2. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  3. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  4. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  5. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  6. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
Trading Center