How to Start a Commodities Exchange
Hey Guys,
As mentioned in subject--I'm curious how Exchanges Work. Most namedly, commodity exchanges. Especially, how do they get started? Tried to look for some case studies on this, but don't really find stuff that is very helpful.
The LME is probably the closest thing to what I am involved with now. As I am in the Recycling Industry, (I physically trade containers of Recycled and/or Recyclable goods), I see a huge opportunity of/if Recyclables (think like Beer Cans > Aluminum Ingots), (Plastic Bottles > Recycled PET Resins) can have a more standardized way of doing business.
And, like the LME having 'LME licensed factory/converter', I can have a similar system. Say, BOG Licensed Recycler.
How does one make money starting an exchange? How does trading commodities form a 'finance perspective' work?
Thought you guys would know a lot better---
I bought this book in an airport a few years back, about starting a mercantile exchange in Dubai. Entertaining read, though as someone working in finance I wish it had been a lot more technical (though it might have lost most of the audience and/or author). Same guy who wrote "Bringing Down the House" and "The Accidental Billionaires" (a.k.a "21" and "The Social Network"). Not saying this will answer any of your questions, but you may be able to research more specific information regarding this particular exchange.
http://www.amazon.com/Rigged-Story-League-Changed-Street/dp/B003A02X98/…
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