As delivery and payment were still in the future, the swap could take place with ease. The main difficulty with this secondary type of trading was that the quantity, the quality and the delivery details of the various contracts entered into by farmers and buyers were diverse. The idea was conceived of setting a standard contract specification guaranteed by an Exchange. The futures contract had evolved. The concept of standardised contract terms is still very much at the heart of today's futures markets.
Delivery is to take place between dates which are pre-fixed by the exchange.
Of course, in practice, there can be no guarantee that any one particular farmer's wheat will grow to the specified standards. There is, therefore, a system of price factors which enable adjustments to be made for any variation in quality. Substitutions and differentials are set by the Exchange. As the agricultural markets reached the point where further growth in futures became increasingly difficult, they both applied their experience to other areas. The CBT introduced a futures contract based on the U.S. 20-year bond in 1977.