Intercontinental Exchange wins trading rights for Russell equity indexes Some say agreement could strengthen ICEâs bid to merge with the CBOT By Bob Manor Tribune staff reporter Published June 18, 2007, 4:11 PM CDT The IntercontinentalExchange Inc., which is attempting a merger with the Chicago Board of Trade, said Monday it had won exclusive right to trade a well-known group of equity index futures previously traded mainly on the Chicago Mercantile Exchange, a move that could weaken the Merc's competing merger bid for CBOT. Late Monday afternoon, ICE announced that it had a licensing agreement to offer trading in the Russell Investment Group of three stock indexes, which include indexes of large- and small-capitalization stocks. Such index futures products have grown increasingly popular in recent years. Patrick O'Shaughnessy, an equity analyst with Morningstar Inc., said ICE's win of the contracts will serve two purposes. One is to diversify its offerings, which now are mainly energy and commodities like sugar and cocoa, to include the increasingly fast-growing universe of financial futures. It is also to strengthen ICE's bid to merge with the CBOT, a merger also sought by the Merc. "They want people to see that they are here to stay and that they are a big player," O'Shaughnessy said. "It certainly brings ICE some credibility." Russell equity indexes have been trading with the Merc since 1992, the company said., although some Russell products trade on the New York Board of Trade, which was recently acquired by ICE. A spokesman for the Merc played down the loss of the Russell. "Russell products make up only 1.5 percent of the total CME equity standard products, which means out of the 6 million contracts we do each day it's below half a percent of total volume," said Allan Schoenberg, director of corporate communications for the Merc. But even back the Merc's bid for CBOT said the loss of the Russell will have some impact on CBOT shareholders, who are to vote on the issue July 9. "It will have a lot of shock value," to the Merc, said Alan Palmer, an independent trader at the CBOT. But he said that in the long run, Merc's offer for CBOT is still more attractive than that of ICE.
I would assume so. Esignal charges $40 right now for ICE entitlement. Also, from what I gather, the cost of execution will be going up as well. https://www.theice.com/publicdocs/nybot/NYBOT_Russsell_Agreement_FAQ.pdf Personally, I am not thrilled with this news at all.
$40! I guess I shouldn't complain about IB's charge of 1 GBP per month. Was interested in following Brent crude anyway..
How do ICE per contract charges compare to CME? Also how good is the ICE electronic platform compared to globex?
Oh no... I'm on TS, which doesn't provide access to ICE... I will have to stop some of my systems if it's true.
They say they will be trading the big Russell contract 2K electronically at half the spread. $500 dollars a point. This would be a major cost saving in terms of commisions and spread but it might only be 1/5 as liquid. Hopefully they can get liquidity up. Also its bit risky, if the big contract takes off and they dont get five times the volume they will lose money in fees???
According to John Carter the move will be sometime in September: http://www.askthetrader.com/freetradingvideos/ttm06192007free/ttm06192007free.html
ICE's exchange matching technology is atrocious compared to Globex. I know someone who arb's the oil calendars and flys and he's always getting legged up due to some component of his order chain being delayed in the ICE engine. They have some wierd distributed server architecture at the exchange that slows down shockingly when they get relatively busy - worse than eurex and only a fraction of the volume.