The world's oldest futures and options exchange, the Chicago Board of Trade (CBOT) was formed in 1848 as a centralized marketplace for the grain trade. Over the years, its product line has expanded to include numerous contracts on agricultural commodities and financial instruments.
An underlying futures contract is the specific futures contract that serves as the basis for an option on that future. For example, an option on a U.S. Treasury bond futures contract at the Chicago Board of Trade (CBOT) would have the Treasury bond futures contract as its underlying future.
