The Chicago Mercantile Exchange may be considering an association with theBermuda-based computerized International Futures Exchange Ltd. (Intex) as a means of expanding trading hours beyond the Chicago business day, well-placed exchange sources have told Knight-Ridder Financial News.
In the battle to maintain market share in the increasingly globalized futures markets, the Chicago Board of Trade last week began trading its Treasure futures contracts at night, to match Tokyo morning hours. Other exchanges, including the Philadelphia Stock Exchange, also are planning night sessions.At a recent press conference in Chicago, Jack Sandner, CME chairman, described the CBT's initiative to trade T-bond futures in the evenings as a step backward. Given the current state of technology and communications, he said, it should be possible to create 24-hour markets without having to trade beyond reasonable business hours.
Intex may represent just the technology. The tiny automated futures exchange, which matches buyers and sellers of its Baltic Freight Index and
Financial News Composite Stock Index (FNCI) futures contracts through personal computer terminals, said last week that it is forming a special task force to seek extended hours for the FNCI contract.
It is our strong belief that extended hours trading via Intex personal computers will let us bypass the extraordinary physical and psychological demands on professional traders and brokers handling customers orders that long hours in the trading pits will bring, Robert Christensen, Intex chief executive officer, said Friday.
The goal of the Intex special task force is to bring the efficiency and error-free performance of fully automated futures trading on Intex to (stock index) futures investors around the globe, Mr. Christensen said.
Although both Mr. Christensen and Mr. Sandner emphatically denied Friday that the CME was considering buying or associating with Intex, other knowledgeable sources within the CME said the move toward an electronic exchange would help the CME expand its share of a market that is becoming highly internationalized.
The CME pioneered cross-continental trading with its mutual offset arrangement with the Singapore International Monetary Exchange in 1984.