Merc promotes screen trading
(Reuters) — The Chicago Mercantile Exchange said on Thursday it would step up efforts to encourage more screen-based trading, but ruled out any quick shutdown of its colorful floor-based open outcry system.
The top U.S. derivatives exchange said some 43 to 45 percent of total trading volumes were already being done on screen, and was as high as 70 percent in some products.
James Oliff, CME vice chairman, said the exchange's electronic transaction committee has been looking at ways to encourage more members to use screens.
``It will enable our members who trade on the floor to become more comfortable trading in the electronic environment,'' Oliff told reporters.
Steps to lure more dealers off the floor would be unveiled in the next few weeks, Oliff said.
CME chairman emeritus and special policy advisor, Leo Melamed said the exchange did not want to turn off the lights on the trading floor overnight.
``We'd rather have an evolutionary process that is working well,'' Melamed, the creator of financial futures, said.
EUREX THREAT
The CME does not expect rival Eurex to make inroads into its market. The Swiss-German derivatives group, the world's largest, is due to start trading in the United States from the beginning of 2004.
Eurex was able to grab the German bund contract from Britain's LIFFE several years ago.
``That is a huge exception of the general rule,'' Melamed said.
The German government and and banks gave their full patriotic support to Eurex's bund contract, and LIFFE, which at the time was floor-based, failed to appreciate the threat of electronic screen trading, he added.
The CME declined to speculate on where its new relationship with cross-town rival, the Chicago Board of Trade, would lead as the latter readies for a possible float.
Melamed said that the common clearing link announced by the two exchanges would give 80 percent of what could be achieved between the two markets in terms of value to its key users.
CME officials said the Far East was a fruitful area for more alliances, particularly Korea, and it has signed a memorandum of understanding with the Shanghai futures exchange.
``The future to us lies in the Far East,'' Melamed said.
Copyright Reuters Limited. |
