Magazine article Modern Trader

Virtual Landscape

Magazine article Modern Trader

Virtual Landscape

Article excerpt

When the Chicago Board Options Exchange announced in late July that it was holding a press conference the next day, we were very curious because this definitely was something out of the ordinary. And its announcement proved equally interesting: CBOE, now that it had launched its own futures exchange, was going to launch with several partners, mainly market making members, its own securities exchange. The logic makes sense: CBOE members have a natural order flow to the various stock exchanges. If they can capture that within a single exchange, costs could go down across the board. So simple, it's a wonder it wasn't thought of sooner.

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Of course, it most likely was thought of sooner, but not really possible until today's regulatory environment. With the flattening of the world both business and regulatory wise, global exchanges are striking out to compete not only in their backyard, but their competitor's too. If that happens to be in another country, or in another market, well, so be it. The world may be flattening, but in context of the markets, where they exist and who regulates them, it's multi-dimensional.

In our Trendlines section, we get into the details of CBOE's move ("CBOE takes on New York," page 14), and cover the New York Stock Exchange's (NYSE) move to merge with Euronext," the European derivatives exchange, in "The courtships of Euronext," page 16. Although the latter is a story that's been told before, this is from the eyes of Jean Francois Theodore, Euronext CEO, who spoke with our French correspondent. It is the back story of how the negotiations started and how it became a European conflagration, with the Deutsche Borse entering a bidding war and even French President Jacques Chirac putting in his two francs on the matter. And though these two stories were covered separately, they are related. …

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