New York Cotton Exchange
|New York Cotton Exchange|
The New York Cotton Exchange ("NYCE") was the first commodity exchange founded in the city of New York. It was founded in 1870 by 100 cotton merchants and brokers following the aftermath of the U.S. Civil War.
At its height, it had 450 members.
Over its history, the NYCE introduced different divisions which were exchanges in orange juice, financial futures and foreign currency futures. Those exchanges were the Citrus Associates of the New York Cotton Exchange (“CITRUS”), New York Futures Exchange (“NYFE”) and the Financial Instrument Exchange (“FINEX”).
The New York Cotton Exchange introduced trading in orange juice futures in the 1960s and propane futures in the late 1970s. Other commodities traded at NYCE included wool and potatoes.
The FINEX division was launched in 1985 at the NYCE to trade financial futures, including the U.S, Dollar Index, which was created by the exchange with the help of Paul Tudor Jones. Index futures were also introduced.
The New York Futures Exchange was created by the New York Stock Exchange to trade futures on the NYSE Composite Index and bond futures. Later, the NYFE was bought by the New York Cotton Exchange. It also traded CRB/Bridge Index futures, based on the Commodity Research Bureau/Bridge Index of 21 commodity components.
The New York Cotton Exchange was part of a multi-exchange merger to create the New York Board of Trade. The exchanges involved in the merger in June of 2004 included the Coffee, Sugar, & Cocoa Exchange, the New York Cotton Exchange, the Citrus Associates of the New York Cotton Exchange, the New York Futures Exchange (NYFE), and the FINEX Exchange.
In 1981, Joe O'Neill was elected as president by a 23-member board of directors of the New York Cotton Exchange. He was also executive director of Citrus Associates of the New York Cotton Exchange and also oversaw the exchanges propane futures.
In 1982, Phillip Hehmeyer was elected to be Chairman of the New York Cotton Exchange. He was replaced by Alex Weissenborn after he committed suicide.
Agricultural Act of 1964
The Agricultural Act of 1964 had a section about cotton trading, which set a price of 30 cents a pound for growers. this subsidy was cited by the New Orleans Cotton Exchange for closing down before the law took force.
The NYCE suspended trading in the 1965-66 cotton futures contracts, pending the results of the bill. The exchange proposed a new contract that would work with the new law. Daily trading volumes during the years leading up to the new law rarely totaled more than 40 or 50 contracts.
The problems with cotton trading led the exchange to consider other new contracts to trade. Two new contracts were tomato paste and orange juice futures. In 1965, NYCE introduced frozen orange juice futures and the creation of the Citrus Associates of the New York Cotton Exchange.
The frozen orange juice contract futures were created in 1966. In 2004, the contract was shifted from the Citrus Associates of the New York Cotton Exchange Inc. to the NYCE.
In 1985, options on frozen orange juice futures were introduced.
Karick Asa Price, Sr., a Florida orange juice grower and a member of the Citrus Associates of the New York Cotton Exchange traded the second contract when trading first began in 1966.
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