Interactive Brokers to make significant investment in OneChicago

Discussion in 'Wall St. News' started by JayS, Mar 16, 2006.

  1. JayS

    JayS

    INTERACTIVE BROKERS TO MAKE SIGNIFICANT EQUITY INVESTMENT IN ONECHICAGO

    Strategic Investor Will Broaden Customer Base, Expand Product Offerings, BringAdditional Technology and Market Maker Support for Security Futures
    Owner Exchanges Renew Commitment as OneChicago Volume Continues to Grow

    CHICAGO/Boca Raton, March 16, 2006 – OneChicago, LLC, the all-electronic security futures exchange offering futures on more than 200 individual stocks, and Interactive Brokers Group LLC, a premier electronic broker dealer, today announced a significant equity investment in the Exchange that will drive further growth in OneChicago’s products.

    In the transaction, Interactive Brokers joins Chicago Board Options Exchange Incorporated® (CBOE®), Chicago Mercantile Exchange Inc. (CME®) and the Chicago Board of Trade (CBOT®) as a major investor in OneChicago. Interactive Brokers will combine its key strengths, including broad access to customers, market making expertise and advanced trading technology with those of CBOE, CME and CBOT to accelerate the market’s growing interest in security futures.

    “We are pleased to be partnering with one of the most highly regarded, successful and innovative firms in the financial industry,” said OneChicago President Marty Doyle. “This investment by Interactive Brokers reflects positively on our recent success and will enable us to build on our momentum.

    “It also represents our mutual confidence in the growth potential of security futures. OneChicago’s volume grew 188% last year. Volume through February is up more than 400% over the same period in 2005, and open interest reached a record 1.8 million contracts last month.”

    Thomas Peterffy, Chairman of Interactive Brokers, said, “OneChicago has a tremendous growth opportunity in the industry. Interactive Brokers' professional customers continue to have increased sensitivity to the cost of financing their positions, and they are realizing that stock futures are the low cost alternative to margin loans or short rebates. Interactive Brokers has the lowest margin rates in the industry, but by using stock futures on OneChicago, our customers can do even better. To that end, we are ready to work with our Chicago exchange partners to broaden the list of products, order types and facilities offered by OneChicago.”

    CBOE Chairman Bill Brodsky stated, “We are delighted that Interactive Brokers is joining us as a strategic partner in OneChicago. We believe Interactive Brokers’ expertise in technology, marketing, education, product distribution and continuing market-making support at OneChicago will accelerate the continued growth of security futures. CBOE's decades-long relationship with Thomas Peterffy and his firm gives us great confidence in the future of this strategic alliance.”

    “The strategic and capital commitment from Interactive Brokers, combined with average daily volumes of about 30,000 and the strong potential for achieving regulatory approval of risk-based margining for security futures products later this year, strengthens both the strategic position and financial condition of OneChicago,” said CME Chief Executive Officer Craig Donohue. “We look forward to working with Tom Peterffy and our colleagues at Interactive Brokers to promote new uses and new ways to trade security futures.”

    CBOT’s President and CEO Bernie Dan said, “This is a monumental opportunity for OneChicago and its market participants and is reflective of the growing interest in U.S. single stock futures as an asset class. This new relationship with Interactive Brokers will fortify OneChicago’s liquidity, broaden the customer base and enhance the education of how security futures can be used to meet portfolio management needs.”

    Mesirow Financial represented OneChicago in the transaction. Financial details of the agreement were not disclosed.

    OneChicago lists 208 futures on single stocks, including futures on the DIAMONDS® Trust, as well as four OneChicago Select Indexes, a series of customer-designed narrow-based security index futures. Each contract is equivalent to 100 shares of the underlying stock or Exchange Traded Fund. Total volume in 2005 was 5.5 million contracts. OneChicago rules permit block and EFP trading and a substantial percentage of the Exchange’s volume results from such trades.

    OneChicago is a joint venture of the Chicago Board Options Exchange Incorporated® (CBOE®), Chicago Mercantile Exchange Inc. (CME®) and the Chicago Board of Trade (CBOT®). All products are electronically traded on the CBOEdirect® match engine and accessible through the CBOEdirect and CME Globex® platforms. Security futures can be traded out of either securities or futures accounts. For more information about OneChicago and its products, please access the OneChicago Web site at www.OneChicago.com.

    Interactive Brokers provides professional traders and investors with direct access to stocks, options, futures, bonds, and forex on over 50 market centers worldwide from a single IB Universal Account. With consolidated equity capital that exceeds US $2.1 billion, IB and its affiliates execute in excess of 500,000 trades/day and trade 20% of US options. In 2006 Barron's awarded Interactive Brokers its top star ranking overall and for lowest cost broker. For more information, please see the Interactive Brokers Web site at www.InteractiveBrokers.com.

    http://www.cme.com/about/press/cn/06-38OneChicagoBIAnnouncment17637.html
     
  2. Wonder what the implications are here.

    Are these guys making any money?
     
  3. cashonly

    cashonly Bright Trading, LLC

    Who's trading these things anyway?
     
  4. One

    One


    Based on the volume figures, no one.

    Has there been any improvement in liquidity, i.e., bid/ask spread and size quotations since introduction of single stock futures?
     
  5. def

    def Interactive Brokers

    Not huge by any means but growing....

    OneChicago February Volume Jumps

    Thirteenth Consecutive Month of Year-Over-Year Increase;

    New Open Interest Record




    CHICAGO, IL – March 1, 2006 – OneChicago, LLC today reported that 394,574 security futures contracts traded at the Exchange in February, 594% more than in February 2005. Average daily volume (ADV) was 20,767. Open interest reached a record 1,822,042 contracts February 17.


    Each single stock futures contract is equivalent to 100 shares of the underlying stock or exchange-traded fund. The top five single stock futures contracts by volume in February were:


    Johnson & Johnson (JNJ1C)

    ConocoPhillips (COP1C)

    Altria Group Inc. (MO1C)

    Merck & Co. Inc. (MRK1C)

    Coca-Cola Co. (KO1C)


    The Exchange lists 208 futures on single stocks, including futures on the DIAMONDS® Trust, as well as four OneChicago Select Indexes, a series of customer-designed narrow-based security index futures.


    OneChicago is a joint venture of the Chicago Board Options Exchange Incorporated® (CBOE®), Chicago Mercantile Exchange Inc. (CME) and the Chicago Board of Trade (CBOT®). All products are electronically traded on the CBOEdirect® match engine and accessible through the CBOEdirect and GLOBEX® platforms. Security futures can be traded out of either securities or futures accounts. For more information about OneChicago and its products, please access the OneChicago Web site.
     
  6. hello everyone ... 1-2 yrs ago I was doing a little volume in NEM SSF's ... and the market makers were quoting a tight spread ...

    recently I looked at NEM again and even traded it a little but the spread was 2-4 X worse now

    if ONE CHICAGO wants business again from me
    and others the MM's need to tighten up their quotes
     
  7. another sign that the stk mkt has topped.
    ib always has bad timing in getting into new ventures.
     
  8. and your logic behind such a dumb statement is ?

    -another sign that the stk mkt has topped.
    ib always has bad timing in getting into new ventures.-
     
  9. zdreg

    zdreg

    please give a us a list of IB ventures so we can can verify whether IB makes investment at the top of the cycle.
     
  10. def

    def Interactive Brokers

    That was a very intelligent reply to Seth. But I have to admit, You are one helluva researcher KingCobra. You must be referring to the brokerage financials that are publicly posted on our site. I'm very impressed, given your comments I must assume your returns on equity far exceed the ones below....

    1999: members capital = 9 million
    2000: members capital = 28 million
    2005: members capital = 251 million
     
    #10     Mar 19, 2006