Futures exchanges are financial exchanges where futures contracts are bought and sold, since such contracts are not tradable over-the-counter. The establishment of the first orderly exchange for these contracts was in Osaka, Japan; The Dojima Rice Exchange was founded in 1710 to protect samurai from missing their payments in rice due to bad harvests. This is more or less what futures exchanges do today; they protect the contract holders as best as possible from dishonoured contracts and the negative effects of price oscillation.
Meanwhile in the United States of America forwards contracts incessantly disappointed their owners through dishonour, so in the mid 19th century, futures exchanges began to surface. Chicago, as a direct result of its strategic position was the first American city to witness the birth and growth of such exchanges. The Chicago Board of Trade (1848) was followed by The Chicago Produce Exchange (1874), the famous Chicago Mercantile Exchange (1919) and the International Monetary Market (1972) – a venue dedicated to foreign currency futures. Once Chicago was beautifully furnished with these competent exchanges, the rest of the country followed suit.
By definition, a futures exchange is simply a commodity used for the trading of futures. The most prominent exchanges today (in no order of importance) are:
Although the futures exchange seems to be an autonomic commodity, it is but one of the three venues involved in a completed contract. Futures commission merchants and traded assets will not be located in any exchange. Physically, all a futures exchange does is determine trading hours, dictate contract terms, decide which underlying commodities to trade and house a trading floor. Only members of an exchange are allowed to deal within it. Non-members must place their trust in a futures commission merchant and use the merchant as an intermediary to deal in the exchange.