Paraphrenitis Blog

Although Boston is not the location of the U.S. Commodity Futures Trading Commission, investors in Boston trust the CFTC, which is located in Washington, D.C. They realize that the agency was created in 1974 to regulate commodity futures and option markets within the USA. They trust the financial integrity of the clearing process and believe that the CFTC presently protects those who participate in the futures market against fraud and abusive trading practices.

Among protections which Bostonians appreciate in the CFTC are in the area of option futures. These options protect against unhealthy price moves in commodities, interest rates, and equity and foreign exchange markets. To understand the operation of option futures, one should become knowledgeable of terms and how they work with each other. Among the important terms to learn are ‘call option’ and ‘put option’.

What began largely as an agricultural commodities exchange network has enlarged and now includes foreign currencies, US and foreign government securities as well as foreign stock indices.

Commodity futures trading is now under the CFTC, which was instituted in 1974 to be a regulatory agency. Attempts have been made, even quite recently, toward bringing the CFTC under the authority of the Security and Exchange Commission (SEC).

Although many Boston residents to not understand futures trading to a great degree, their confidence in the CFTC helps them to do their investing with less fear than they would have without the CFTC involvement.

The major operating units of the CFTC include the Division of Enforcement, the Division of Clearing and Intermediary Oversight, the Division of Market Oversight as well as the offices of the chief economist, general counsel and the executive director of the agency.

Without the U.S. Commodities Futures Trading Commission working in their behalf, the investors from Boston would probably be a smaller number. Their confidence helps to make the system work well.