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Could you explain the differences between the exchanges? I know about the NYSE and Nasdaq, but what are the differences between the CBOT, CBOE and the Chicago Mercantile Exchange? Thanks, E.B.

In the same way that some shoppers like


and others prefer


, traders choose exchanges according to their needs and tastes. And while there is some product overlap among the exchanges, creating healthy competition, not all exchanges offer the same suite of products.

Both the NYSE and the Nasdaq, for example, offer stock trading, but neither offers option trading. That means traders will have to shop elsewhere for their calls and puts, like one of the six exchanges that traffic in options, namely the

American Stock Exchange


International Stock Exchange


, the CBOE, and the Pacific, Boston and Philadelphia exchanges.

(Boston and Philadelphia have regional equity-trading exchanges with long histories but low market share. The Pacific Exchange still trades options, but its stock business was purchased and merged into the

NYSE Group



Even when it comes to stock trading, there are differences between the exchanges. The three New York-based stock exchanges -- the NYSE, Nasdaq and Amex -- all maintain different listing requirements and, as a result, the exchanges take on the characteristics of their member companies. The Nasdaq and Amex tend to attract more tech and biotech companies because of their more lenient entry standards when it comes to profitability.

None of these exchanges deals in commodities, however. In New York, that's the domain of the

New York Mercantile Exchange

, which is the world's largest physical commodity futures exchange and the trading forum for energy and precious-metals contracts. The Nymex lists futures and options contracts for crude oil, gasoline, heating oil, coal, electricity, gold, silver and platinum, to name a few.

Actually, the so-called Second City of Chicago has the edge in commodity exchanges, especially when it comes to futures and agricultural goods.

The oldest of the three Chicago exchanges, the Chicago Board of Trade was founded in 1848 and went public just last year. More than 50 different futures and options on futures are traded on the CBOT by open outcry, or auction, as well as electronically.

In open outcry trading, traders stand in a trading pit and call out prices and quantities that indicate their willingness to buy or sell. Because all the traders are shouting together, they also use hand gestures to convey information.

In its early history, the CBOT only dealt in agricultural commodities, but it has evolved to include financial futures products such as U.S. Treasury bonds and notes, stock indexes and swaps. South American soybean futures and ethanol futures are the CBOT's newest products, introduced in 2005. (For more information on futures, check out a recent

"Booyah Breakdown" column by Tracy Byrnes.)

For most of its history, open auction was the primary method of trading at the CBOT. In 1994, however, the CBOT launched its first electronic trading system, which has since replaced open auction as the dominant method of trading.

The original name for the Chicago Mercantile Exchange, when it was founded back in 1898, was the Chicago Butter and Egg Board. Initially, its members traded futures contracts on agricultural commodities via open outcry. Like the CBOT, however, the CME now offers both electronic and auction-based trading.

CME is the largest futures exchange in the country, and its products fall into five major areas: interest rates, equities, foreign exchange, agricultural commodities and alternative investments. The CME also was the first U.S. financial exchange to go public, doing so in December 2002.

The Chicago Board Options Exchange is by far the youngest of the three exchanges. It was founded in 1973 as a place to trade equity options. On the CBOE's first day of business, 911 contracts traded on 16 underlying stocks. Fast-forward to 2005, when CBOE options contract volume hit an all-time record of more than 468.2 million contracts with a notional value of more than $12 trillion.

The CBOE has added additional products over the past three decades, such as options on exchange-traded funds, interest rates and volatility indices.