Commodity Exchange Rules

Basics

A commodities exchange allows clients to buy and sell commodities such as wheat and pork bellys with the exchange getting a cut. It is essentially an open market where the sellers advertise their wares and the buyers buy (and become sellers) in an effort to make a profit. In the electronic age, such markets could be handled via a network, where sellers broadcast their product and price, and the buyers indicate their desire to buy a particular product at a particular price.

This version will have traders who start with a certain amount of cash as determined by the game, and they can buy and sell as they see fit trying to maximize their value. At any point, they can quit the game having only cash left, or they can quit, putting all of their commodity shares back into the central pool to be sold to the highest bidder.

Some of you may notice the similarity to pit.

Commodities

To make it simple, use the following commodities with the given initial values:

Commodity Price Measure
Oil $45.00 Barrel (bbl)
Natural Gas $5.43 mmBTU (million BTU's)
Wheat $2.40 Bushel (bu)
Soybeans $6.50 Bushel (bu)
Corn $2.40 Bushel (bu)
Cattle $110.00 Hunderweight (hwt)(100 pounds)
30 Day Loan 6% Percentage
Gold $400 Ounce
So those are the starting values of the various commodities. As the game unfolds, bidders will drive the prices higher or lower with their bidding.
Bidding
Bidders should be able to sell and buy anything. For example, a buyer can offer to buy Corn at $2.60 per bushel and the only rule should be that the bidder has to have the money to make the purchase. If a bidder bids and can't pay, they should be punished in some way. In the real-world they will probably lose their seat in the market, but you can be creative. A seller can offer something. For example, money as a 30-day loan at 7% or cattle at $90/hwt. Of course, they can't sell more than they have.
The 30-day loans have a time element that has to be honored. You can count the 30 days as an amount of time, like 3 minutes, or you could make your loans payable on demand or after a certain number of trades.

Startup
You could start the game with all of the commodities owned by the market and the users having nothing but cash, or you could provide each player with a set of commodities based on some random choice. For example, you could randomly choose three commodities and quantities and give a new player that starting condition along with some random amount of cash. You should be careful to balance the cash and commodity amounts or you could have a game where there isn't enough money to do much, or so much money that prices are bid up outrageaously (like the Bozeman real estate market). A simple rule for N players would be to give each player $10,000 and create $12,000 of each commodity, so that no player can corner a market without making some money first. Try some things and see what works well.

Strategies
There is no overriding reason for playing this game a certain way. You could try to corner a market in hopes that people will demand what you have, or you could try to diversify in the hopes that by having a bit of everything, you can avoid selling at low prices and sell at high prices. Since everyone could simply sit and do nothing, you need to force the players to make trades. For example, you have to make an trade every 10 seconds at the least, and you have to make a sale or purchase every 20 seconds. Otherwise, you will be hit in the face with a pork belly.
You could also have a time limit with all wealth based on the current state at the end of the time period. Values should be based on the last selling price accepted by any player.

The Future
The commodity trading game is the start of a complete simulation of an economy. It has food (cattle, wheat, soybeans), feed for cattle (soybeans, corn), energy (crude oil, natural gas), inherent value (gold) which can be used to represent static wealth and credit. If you added things like labor, water, land and a few other things, you could make this much more realistic.
Of course, in commodity trading, uncontrollable factors like the weather, global conflicts, pestilence and disease play a role in setting prices. That would also be an interesting addition.

Commodity	Price	Measure
Oil	$45.00	Barrel (bbl)
Natural Gas	$5.43	mmBTU (million BTU's)
Wheat	$2.40	Bushel (bu)
Soybeans	$6.50	Bushel (bu)
Corn	$2.40	Bushel (bu)
Cattle	$110.00	Hunderweight (hwt)(100 pounds)
30 Day Loan	6%	Percentage
Gold	$400	Ounce So those are the starting values of the various commodities. As the game unfolds, bidders will drive the prices higher or lower with their bidding. Bidding Bidders should be able to sell and buy anything. For example, a buyer can offer to buy Corn at $2.60 per bushel and the only rule should be that the bidder has to have the money to make the purchase. If a bidder bids and can't pay, they should be punished in some way. In the real-world they will probably lose their seat in the market, but you can be creative. A seller can offer something. For example, money as a 30-day loan at 7% or cattle at $90/hwt. Of course, they can't sell more than they have. The 30-day loans have a time element that has to be honored. You can count the 30 days as an amount of time, like 3 minutes, or you could make your loans payable on demand or after a certain number of trades. Startup You could start the game with all of the commodities owned by the market and the users having nothing but cash, or you could provide each player with a set of commodities based on some random choice. For example, you could randomly choose three commodities and quantities and give a new player that starting condition along with some random amount of cash. You should be careful to balance the cash and commodity amounts or you could have a game where there isn't enough money to do much, or so much money that prices are bid up outrageaously (like the Bozeman real estate market). A simple rule for N players would be to give each player $10,000 and create $12,000 of each commodity, so that no player can corner a market without making some money first. Try some things and see what works well. Strategies There is no overriding reason for playing this game a certain way. You could try to corner a market in hopes that people will demand what you have, or you could try to diversify in the hopes that by having a bit of everything, you can avoid selling at low prices and sell at high prices. Since everyone could simply sit and do nothing, you need to force the players to make trades. For example, you have to make an trade every 10 seconds at the least, and you have to make a sale or purchase every 20 seconds. Otherwise, you will be hit in the face with a pork belly. You could also have a time limit with all wealth based on the current state at the end of the time period. Values should be based on the last selling price accepted by any player. The Future The commodity trading game is the start of a complete simulation of an economy. It has food (cattle, wheat, soybeans), feed for cattle (soybeans, corn), energy (crude oil, natural gas), inherent value (gold) which can be used to represent static wealth and credit. If you added things like labor, water, land and a few other things, you could make this much more realistic. Of course, in commodity trading, uncontrollable factors like the weather, global conflicts, pestilence and disease play a role in setting prices. That would also be an interesting addition.