SSF Update

Discussion in 'Financial Futures' started by saico, Sep 9, 2002.

  1. saico


    Again bad news !

    Delays hit new futures trading

    September 9, 2002


    A new frontier in futures trading still beckons speculators and securities firms, but getting there demands a longer journey than expected.

    As of next Friday, single-stock futures are legal investment products in the United States. They'll allow investors for the first time to deal in a future on a single, popular stock--such as Coca-Cola or General Electric--much like they can trade a contract tied to the price of corn.

    But there will be no place to trade stock futures for a while. Despite talk of a September start a few weeks ago, two of the exchanges set up for the product now say they won't be ready until well into October. And that might be optimistic.

    Some insiders attribute the delay to a lack of interest from large brokerages too preoccupied with Wall Street bearishness to ponder a new type of derivative. R. David Gary, spokesman for the Commodity Futures Trading Commission, said that with trading firms "concerned about what's going on in the primary market, there's no overwhelming rush'' to adapt computer systems for stock futures.

    The CFTC is the federal agency that governs futures trading. Legislation allowing single-stock futures was made possible by an accord between the CFTC and the Securities and Exchange Commission, the agency that polices stock trading, in late 2000.

    Other experts said the delay comes from last-minute regulatory wrangles, even though the CFTC and SEC agreed Aug. 2 on overall rules. Brokerage's reluctance to plan for stock futures probably reflects normal resistance to anything new, some said.

    William Rainer, chairman of a stock-futures exchange that's a joint venture of the Chicago markets, said interest in the product has grown since the federal agencies gave it a green light. "The old competitive juices are flowing now that the rules are out,'' he said.

    He said his operation, OneChicago LLC, will be ready for business in late October or, if hitches develop, early November. OneChicago is owned by the Chicago Mercantile Exchange, Chicago Board Options Exchange and the Chicago Board of Trade.

    Another major competitor is Nasdaq Liffe Markets LLC, a partnership of Nasdaq and London's futures exchange. Spokesman Ray Carmichael said Nasdaq Liffe is planning a launch sometime in October.

    Also approved for carrying stock futures is the Island electronic trading network. An Island spokesman said the system would start trading later than the other exchanges, probably by early 2003.
  2. sounds like they won't be liquid until island gets on board next year.
  3. Pabst


    Get real. The Chicago Exchange will smoke Island. 150 years of futures prowess will dictate where the volume goes. IMO Islands "partnering" in equities with Cincy, which is pretty much owned by the CBOE, means that Island will probably merge SSF trading with Chicago anyway.
  4. Hubert


    these should be interresting to see how they trade
  5. I meant that they will be reasonably liquid by the time island comes online with them. Island will help with liquidity, and by then they will have been traded for several months. I don't think they will be that liquid right from the beginning with just One chicago.
  6. Pabst


    Dot, knew what you meant. I was just being a smart ass. :)
  7. MarkHyman

    MarkHyman Advanced Futures

    Next week they will be announcing when they will begin trading
    and how they will be priced
  8. Aaron


    John Lothian (of the Price Futures Group) indicated a November launch at a talk he gave last night in Chicago.
  9. shyhh


    Saw this at the exchange website :-

    OneChicago Announces Oct. 25 Launch Date, Transaction Fee Schedule

    CHICAGO, IL ESept. 24, 2002 EOneChicago, LLC today announced that it intends to launch security futures trading on Friday, Oct. 25, 2002, subject to certain regulatory approvals. The Exchange also published its transaction fee schedule.

    OneChicago Chairman and Chief Executive Officer William J. Rainer said, “OneChicago is ready to offer futures on individual stocks and narrow-based indices. We look forward to the opening of this marketplace and the development of this new element of the nation’s capital markets system.E

    OneChicago, a joint venture of the Chicago Board Options Exchange® (CBOE®), Chicago Mercantile Exchange Inc. (CME) and the Chicago Board of Trade (CBOT®), will offer futures contracts on 85 single stocks and 15 narrow-based indices, beginning with 20 of these products on the first day of trading. The Exchange will list the remaining contracts over the ensuing two weeks. All of OneChicago’s products will be electronically traded through both CBOEdirect® and GLOBEX® platforms and can be carried in either securities accounts or futures accounts.

    The new contracts will allow fund managers, individual investors, professional traders and others to manage their exposure to stocks. Security futures can be used independently or in conjunction with stocks, stock options or stock index futures to execute a variety of trading strategies for U.S. listed equities.

    Before trading can begin, however, the Securities and Exchange Commission (SEC) must approve OneChicago’s customer margin rules. The SEC and the Commodity Futures Trading Commission must also approve the language of the risk disclosure statement that all firms will be required to send to their customers to permit trading in security futures.

    Transaction Fees

    OneChicago today also announced its schedule of transaction fees. The fee includes all exchange and clearing fees as well as the mandatory Securities Exchange Act Section 31(d) fee on single stock futures. OneChicago said it intends to waive all of these transaction fees for the first 30 days of trading at the Exchange.

    OneChicago’s standard rate to trade single stock futures is 30 cents per contract per side, and the standard rate for narrow-based indices is 45 cents per contract per side. OneChicago also offers discounted rates for eligible members of the Exchange of 15 cents for single stock futures and 20 cents for narrow-based indices.

    "The marketplace has asked us for a simple and competitive fee structure. I believe OneChicago has delivered on that request,ERainer said.

    For additional information about OneChicago, further details of the fee structure and OneChicago products, access the OneChicago Web site at
  10. Aaron


    Great. Thanks, Shyhh.
    #10     Sep 24, 2002