Timeline

The rice market at Dojima in Osaka receives official sanction from the Tokugawa shogunate. Merchants trade standardised claims on future rice deliveries, with a clearing house and settlement rules. It is generally described as the first organised futures market anywhere.

Founded by a group of Chicago merchants to bring order to grain trading. Within two decades it introduces standardised contracts and a margin system, which is the point at which futures stop being private forward agreements and become instruments anyone can trade without knowing their counterparty.

On the London Stock Exchange, both words describe fees paid to defer settlement of a transaction: contango charged to a buyer postponing, backwardation to a seller. The settlement system that produced them is long gone. The words survived by being borrowed into commodity markets for a related but different idea.

Louis Bachelier submits Théorie de la spéculation in Paris, modelling price movement as a random walk and deriving option values from it. It is the first mathematical treatment of the problem and it is then largely ignored for more than fifty years.

Richard Wyckoff publishes on reading the ticker for the relationship between effort and result, while the bucket shops that trained a generation of speculators are being legislated out of existence. The questions being asked — who is pressing, is it working — are the same ones delta asks today, in a different notation.

The Chicago Mercantile Exchange opens the International Monetary Market and lists futures on currencies. Until this point futures had been about physical commodities. Extending the machinery to financial instruments eventually produces the majority of what trades today.

The Chicago Board Options Exchange begins trading listed options on 26 April, giving options a central marketplace and a clearing house for the first time. In the same year Black and Scholes publish their pricing paper and Merton publishes his extension of it. A market and a model appear within months of each other.

After several years of development by J. Peter Steidlmayer and the Chicago Board of Trade, Market Profile and the Liquidity Data Bank reach the public. Sources differ on the exact year: some record the data going online in 1984, others the public CBOT product in 1985. For the first time, information about the distribution of activity within a session is available to people who are not standing in the pit.

CME Globex begins trading on 25 June, built with Reuters, starting with a handful of currency and interest rate products. Electronic matching replaces the pit over the following two decades, and in doing so it creates the timestamped record of quotes and prints that every order flow tool depends on.

CME launches the E-mini S&P 500, a smaller contract designed to trade electronically rather than in the pit. It becomes the instrument on which most retail futures order flow analysis is subsequently practised.

US equity markets complete the move from fractional pricing to decimals. Minimum increments collapse, spreads narrow sharply, and displayed size at each price falls with them. The economics of standing in the book change permanently.

On 6 May, US equity indices fall and recover several percent within minutes, focusing regulatory attention on electronic market structure and liquidity that disappears under stress. In July the Dodd-Frank Act is signed, including the provision that makes spoofing explicitly illegal in US markets.

Navinder Sarao is arrested in London on charges connected to the Flash Crash, in one of the first high-profile cases brought under the anti-spoofing provision. The cases that follow establish that intent is evidenced through order and cancellation records, which is why the offence is defined by behaviour over time rather than by any single order.

Market-by-order feeds, footprint charting and volume profile tooling become standard features of retail platforms rather than institutional privileges. The constraint stops being access to the data and becomes the much older problem of knowing what it does and does not support.