E-Derivatives Exchanges: Will Eurex Dominate the US Market?

May 2, 2001

Abstract

Boston, MA, USA May 3, 2001

Derivatives Exchanges: Will Eurex Dominate the US Market?   

Eurex is the exchange best positioned to take on the US derivatives exchanges who have resisted electronic trading, according to Celent

Unlike the US exchanges, leading European derivatives exchanges have wholeheartedly embraced electronic trading platforms. As these European electronic exchanges gradually invade the US derivatives market, mainly through alliances with major US derivatives exchanges, the pressure to close open outcry pits within the US market structure will increase.  We believe that the electronification of all derivatives exchanges is inevitable.

 The following derivatives exchanges are covered in this report:

  • Chicago Board of Trade
  • Chicago Board Options Exchange
  • Chicago Mercantile Exchange
  • Eurex
  • London International Financial Futures and Options Exchange
  • Marché à Terme d'Instruments Financiers

According to Sang Lee, the author of the report, "US-based derivatives exchanges, such as CBOT, CBOE and CME are risking their very existence by insisting on the continuation of open outcry trading pits. Increased competition from their European rivals will further increase the urgency for rapid adoption of electronic trading platforms in the next six to twelve months." 

He goes on to add that, "When confronted with competition from Eurex arrogance and complacency led to the downfall of the open outcry pits of Liffe, once the largest derivatives exchange in Europe. US-based derivatives exchanges face a similar fate unless they act quickly to stave off challenges from their European rivals. Otherwise, European electronic exchanges, with Eurex as the leading candidate, will come to dominate the US market. While Eurex currently has alliances with some US exchanges preventing Eurex from full competition, we believe that the frustratingly slow progress of electronic trading will lead Eurex to abandon these partnerships and compete head-to-head with US exchanges."

The report provides a comprehensive analysis of each derivatives exchange, analyzing their business as well as their technology strategies. 

A Table of Contents is available online.

of Celent Communication's research services can download the report electronically by clicking on the icon to the left.

        

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

Boston, MA, USA   May 3, 2001

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Return to report abstract  

EXECUTIVE SUMMARY

3

INTRODUCTION

4

MARKET OVERVIEW

6

 

Derivatives Market

6

 

Market Trends

7

 

Electronic vs. Open Outcry

10

DERIVATIVES EXCHANGES

14

 

Eurex

14

 

Chicago Board Options Exchange (CBOE)

17

 

Matif (Parisbourse)

19

 

Chicago Board of Trade (CBOT)

21

 

Chicago Mercantile Exchange (CME)

23

 

London International Financial Futures and Options Exchange (LIFFE)

25

FUTURE TRENDS

27

 

        

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