Abstract
One of the most important aspects of commodities and futures exchanges is the launching of a new contract. There are some studies analyzing the reasons for success or failure of new contracts, based on the financial literature. This paper utilizes the tools of economic history to analyze the development of a futures contract for cotton by the São Paulo Commodities Exchange (BMSP), during the period 1917-1958. The research used statistical records of the BMSP archives. Most mature economies, like the United States, evolved from the trading of forward contracts to the trading of derivatives contracts. Developing countries, like Brazil, tried to jump from cash markets to futures markets in commodities, without first developing forward markets, as shown by the history of the cotton contract. The main conclusion is that in a developing country, in addition to all relevant factors applying to advanced countries, it is necessary to organize the production chain of the business, and coordinate efforts in the areas of learning, innovation, technology and, institutional development.