The New York Futures Exchange is a global trading center that matches buyers and sellers of numerous goods and commodities together. Unlike the stock exchange, where shares in a company are bought and sold instantly, the New York Futures Exchange deals with items that are to be sold in the future. For example, if a steel manufacturer in Denmark was in the process of producing a large amount of product, he would want to have a buyer lined up so that he could quickly sell the material once it was completed. What the New York Futures Exchange does is match that manufacturer with a buyer, and together they would agree to a contract that stated at a specific future date the buyer would pay a set amount of money for the steel. Millions of items are sold on the New York Futures Exchange daily in these exact scenarios, with almost any commodity imaginable being available.
Before the New York Futures Exchange was operational, many industries had a very difficult time selling their products for a fair price. Perhaps the hardest hit were farmers, because even though they would enter into a formal futures contract with a buyer, one party or the other would back out once it came to harvest. If the crop was worth substantially less than when the contract was signed, for example, the farmer would try to peddle his goods elsewhere. The New York Futures Exchange regulates these types of trades to ensure that both the buyer and the seller complete their obligations within the contract.
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While many would question the purpose behind a buyer entering into such a contract, the business principals are simple. An investor does not simply buy items at random, and just like on the stock market, a calculated prediction is made as to what the item's overall value will be several months in the future. Many traders, for example, have aggressively sought gold on the New York Futures Exchange because of its steady rise in value over the years.
Since the prospect of futures has steadily risen throughout the 20th century, in 2006, the New York Stock Exchange partnered with the Paris, Amsterdam, Lisbon, and Brussels exchanges to form the first intercontinental futures market ever. By bringing together global buyers and sellers in one convenient location, the prospect for both parties has greatly increased. Another big draw to the New York Futures Exchange is that standardized contracts are rarely implemented, allowing business people from both sides of the agreement to define the terms as they see fit.