From the mid 1970s on, the arbitrage opportunities offered by bonds and mortgage-backed securities were expanded by the emergence of markets in derivatives of these securities. The Chicago Board of Trade began trading futures on mortgage-backed securities in October 1975 and futures on U.S. Treasury bonds in August 1977. Markets also began to develop in derivatives (such as bond options and swaps) sold "over the counter" that is, by direct, institution-to-institution negotiations. (Swaps are contracts to exchange income streams, such as fixed-rate and floating-rate interest on the same notional principal sum.)

Donald MacKenzie, An Engine, Not a Camera, loc. 959