From the March 01, 2011 issue of Futures Magazine • Subscribe!

The Futures: The rise of the speculator and the origins of the world’s biggest markets

The Futures: The rise of the speculator and
the origins of the world’s biggest markets
By Emily Lambert
Basic Books
$26.95; 210 pages

In “The Futures: The rise of the speculator and the origins of the world’s biggest markets,” Emily Lambert strives to tell the story of the origins and rise of futures trading. As would be expected, she focuses on the two largest futures exchanges in Chicago — the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange (CME).

The book does a good job of introducing people completely unfamiliar with the futures markets to their early origins. Lambert particularly shines as she recounts early attempts to corner different markets and it is evident she did her research.

The book is written in an easy-to-approach style with very little technical jargon. What little jargon there is, Lambert clearly explains, making the book even more accessible to those new to the futures world.

Lambert uses much of the book to recount the early days of futures trading. She particularly focuses on the differences between the CBOT and CME, and the attitudes of traders at each toward one another.

“The Futures” is organized around the different futures products and when they were introduced. Lambert shows the reader the rationale for the new product, the steps taken by players at each exchange to ensure the new product would be successful and what was on the line with each new offering.

Arguably, one of the themes of the book could be speed. Lambert shows that as the futures markets have evolved, things have sped up. Technology advances have sped up the trading process from having to buying a membership, to just calling your broker, to now actually making a trade as easily as just clicking online. Further, the speed of change has accelerated. While it once took years to see meaningful changes at the exchanges, that now can happen in just months.

Lambert moves quickly through the history of each exchange and product. Consequently, don’t expect to learn much more than the names of a few important exchange members. While readers never really get to know any one character very well, many are nonetheless memorable because of the antics and personalities she describes.

The book covers the history of the two exchanges from their inception through the financial crisis of 2008. Surprisingly, of the 210 pages, Lambert only used about eight to tell the story of the merger between the two. She never goes into great detail as to how the merger actually happened nor does she convey much of its complexity or the emotions it evoked. Perspectives from some of the key players would have gone a long way. (For an in-depth look at the CME-CBOT merger see Zero Sum Game by Erika S. Olson.)

Ultimately, Lambert’s book is a good starting point for someone looking for the history of the futures markets. It introduces the players and gives a feel of the trading culture. While she casts a wide net over the topics she covers, Lambert does not go very deeply into any one of them. It is a quick, easy read that shows where the futures markets came from and serves as an introduction to that dynamic world.

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