NYBOT to offer electronic trading
By Jennifer Hughes
The Financial Times
Published: January 25 2006
The New York Board of Trade is planning to offer electronic trading for the first time, according to an agreement signed with the Chicago Board of Trade which will host NYBOT’s financial products on its electronic system.
The move is the latest in the trend towards electronic trading among the biggest US exchanges and a first for NYBOT, best known for its heaving pits of coffee, sugar and cotton traders.
Under the non-binding agreement announced yesterday, CBOT will host trading of NYBOT’s currency futures and options products and its index futures, including the widely followed Russell indices.
“Their view of where the commodities futures market is going is very similar to ours,” said Harry Falk, chief executive of NYBOT. “We think there are a lot of synergies we can explore.”
While European exchanges are largely all-electronic today, most of the biggest US exchanges are still hosting large open-outcry operations amid an ongoing debate over the future of floor trading.
Earlier this week, CBOT said it was seeking a meeting with its members to approve rule changes that would allow it to electronically trade its agricultural products, which are still floor-based.
CBOT and the Chicago Mercantile Exchange have led the way in developing electronic trading, driven by their cross-town rivalry and competition threats from Deutsche Börse’s Eurex US platform. But the shift away from floors has made it potentially easier to poach or imitate a rival’s flagship products.
Earlier this week, CME shares reached new highs on reports it was planning to launch electronically-traded energy futures contracts, bringing it into competition with the New York Mercantile Exchange, in which last month it was reportedly considering taking a stake.
Mr Falk shrugged aside speculation that this could be the first step towards a more permanent link-up with CBOT.
“We’re a go-it-alone exchange right now. Our products are booming and our members are happy but we’’re open to anyone who wants to talk about the future,” he said.
John Lothian, president of the electronic trading division of Price Group, a Chicago broker, said: “This deal doesn’t mean that CBOT’s platform is going to be the one that NYBOT is going to choose for its other products should it decide to take them electronic.” |
