New York Board of Trade (NYBOT) Defined

New York Board of Trade (NYBOT) Defined

Founded in 1870, the New York Board of Trade (NYBOT) is a commodity futures exchange located in New York. By allowing these commodities to be traded indirectly using futures contracts, institutions such as the NYBOT allow the producers and buyers of these commodities to lock in prices ahead of time in order to protect against unforeseen volatility or production shortages. The New York Board of Trade (NYBOT) is a commodity futures exchange that today forms part of the ICE since 2006. When the NYBOT was founded in 1870, trading was conducted exclusively by humans, often working on large and loud trading floors. Founded in 1870, the New York Board of Trade (NYBOT) is a commodity futures exchange located in New York.

The New York Board of Trade (NYBOT) is a commodity futures exchange that today forms part of the ICE since 2006.

What Is the New York Board of Trade (NYBOT)?

Founded in 1870, the New York Board of Trade (NYBOT) is a commodity futures exchange located in New York. In 2006, it became part of the Intercontinental Exchange (ICE).

For much of its history, the NYBOT facilitated commodities trading using human traders in large trading floors, or "pits." Today, the vast majority of this trading is conducted through computers.

The New York Board of Trade (NYBOT) is a commodity futures exchange that today forms part of the ICE since 2006.
NYBOT previously specialized in physical commodities such as sugar and coffee, but has become all-electronic since incorporation into the ICE.
The NYBOT is one of the oldest asset exchanges in the U.S., dating back to 1870.

Understanding the New York Board of Trade (NYBOT)

The NYBOT is focused on physical commodities such as coffee, cotton, and cocoa. By allowing these commodities to be traded indirectly using futures contracts, institutions such as the NYBOT allow the producers and buyers of these commodities to lock in prices ahead of time in order to protect against unforeseen volatility or production shortages.

With standardized futures contracts, companies dependent on these commodities can buy them at predetermined prices for later delivery weeks, months, or even years in the future. In doing so, they can be more certain of the cost of their raw materials, regardless of how the spot prices of those commodities may fluctuate in the interim period. The Chicago Mercantile Exchange (CME) plays a similar role, facilitating futures trading in commodities such as livestock, metals, and crude oil.

When the NYBOT was founded in 1870, trading was conducted exclusively by humans, often working on large and loud trading floors. In 1997, the NYBOT acquired the Coffee, Sugar, and Cocoa Exchange (CSCE), increasing their foothold in the commodity trading marketplace. This combined entity was then purchased by the ICE in 2006.

Real World Example of the New York Board of Trade (NYBOT)

A few years after the ICE acquired the NYBOT, the traditional trading floors were closed off so that all trades would be executed electronically. Today, the ICE operates as an entirely electronic exchange, enabling near-instant transactions among market participants throughout the world. 

This move toward digitization has also corresponded with a vast increase in the size of the commodities trading markets themselves. As its name suggests, the ICE is a truly international marketplace in which traders can transact in commodities ranging from electricity and jet fuel to derivative products based on interest rates, currency values, and various other underlying assets.

Related terms:

Chicago Mercantile Exchange (CME)

The Chicago Mercantile Exchange or CME is a futures exchange which trades in interest rates, currencies, indices, metals, and agricultural products. read more

Commodity Market

A commodity market is a physical or virtual marketplace for buying, selling, and trading commodities. Discover how investors profit from the commodity market.  read more

Commodity

A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. read more

Contract Market

Contract market, or designated contract market, is a registered exchange where commodities and option contracts are traded. read more

Coffee, Sugar and Cocoa Exchange (CSCE)

The Coffee, Sugar and Cocoa Exchange (CS&CE) was a commodities exchange established in September 1979 to facilitate futures trading. read more

Derivative

A derivative is a securitized contract whose value is dependent upon one or more underlying assets. Its price is determined by fluctuations in that asset. read more

FINEX

FINEX was the financial instruments and currency products division of the New York Board of Trade (NYBOT). read more

Futures Contract

A futures contract is a standardized agreement to buy or sell the underlying commodity or other asset at a specific price at a future date. read more

Intercontinental Exchange (ICE)

The Intercontinental Exchange is a market-based in Atlanta, Georgia that facilitates the electronic exchange of energy commodities. read more

New York Futures Exchange (NYFE)

The New York Futures Exchange (NYFE) was a subsidiary of the New York Stock Exchange (NYSE) focused on the trading of futures and options contracts. read more