More than 90 percent of worldwide trading in euro futures takes place in Chicago, according to an estimate by Malawi RPCV and Commodity Futures Trading Commission Director Michael Gorham
Merc, CBOT make overseas push
Daily Herald Reports
Posted 5/23/2004
The Chicago Mercantile Exchange and the Chicago Board of Trade, the two biggest U.S. futures markets, are pushing to win business in Europe and Asia as a surge in electronic trading makes overseas expansion easier.
"We've got a decade to make up for in terms of market penetration and distribution," Board of Trade Senior Vice President Robert Ray, 51, said in an interview in Chicago. "If we are going to grow, we are going to need to penetrate to a far more significant degree those markets outside of the U.S."
Electronic trading has made buying and selling on the Chicago markets cheaper and faster. Last year, more than half of transactions at the Board of Trade were handled by computer; at the Mercantile Exchange, electronic trading has risen to almost half of transactions, from 15 percent four years ago.
Both exchanges have cut fees and built communications links that reduce the cost for European traders to connect to Chicago to lure groups that now buy and sell futures on Frankfurt-based Eurex AG and London-based Euronext.liffe. The European exchanges, both all-electronic, have built a U.S. following that accounts for as much as a quarter of trading in some futures contracts.
Neither Chicago exchange will say how much business it gets from Europe. Both say their efforts are paying off.
"There is tremendous interest and tremendous demand for trading our products" in Europe, Mercantile Exchange Chief Executive Craig Donohue, 42, said in an interview.
The Mercantile Exchange in November cut fees for some European traders by as much as 73 percent. The exchange also lowered fees for Asian hedge funds and banks.
Currency futures may have particular appeal for European traders, he said. More than 90 percent of worldwide trading in euro futures takes place in Chicago, according to an estimate by Commodity Futures Trading Commission Director Michael Gorham.
