These have not been approved for trading in the US by the CFTC yet. . . . . but LIFFE says that approval should be forthcoming in a couple of months. JP Morgan did a white paper in which they stated: "As can be seen from the table below, the new FTSEuro80 contract has a short-term tracking error of 4.6% to the EuroSTOXX index, versus 7% for the EuroSTOXX50 contract, which represents a significant improvement." The paper can be found at http://www.ftseurofirst.com/downloads/FTSEurofirst_Comparison_May2003_JPMorgan.pdf Anyone care to make a prediction as to whether this new contract has a chance? Or will its introduction turn out to be a lame pot-shot at Eurex? Right now volume in the contract is *very* thin -- about 2500/day. However, when the FESX came out, it was pretty thin too. The exchange fee is 30 pence a round turn (about $0.50) compared to EUR0.60 a turn for the FESX (about $0.66).
Has the LIFFE ever beaten EUREX at anything? German institutions dominate the arena. Only one place they are going to trade, Frankfurt!
So far, not yet. . . . . and everyone seems to think that they are going to kick the CBOT's rear end too! And it has been rumoured that they have armed themselves more heavily for their battle against the CBOT than they did for the Bund takeover a few years ago. Should be interesting to see how that plays out.