Before futures trading came about, any producer of a commodity, for example a farmer growing wheat or corn, found himself at the mercy of a dealer when it came to selling his product.
The system needed to be legalized in order that is specified amount and quality of product could be traded between producers and dealers at a specified date.
Contracts were drawn up between the two parties specifying certain amount and quality of a commodity that would be delivered in a particular month and that’s how futures trading began.
A few decades ago future’s markets consisted of only a few farm products, but now they’ve been joined by a huge number of tradable commodities such as metals like gold, silver and platinum, livestock like pork bellies and cattle, energies like crude oil and natural gas, foodstuffs like coffee and orange juice and industrials like lumber and cotton.
Modern futures markets include a wide range of interest rate instruments, currencies, stocks and other indices such as the Dow Jones, NASDAQ and S&P 500