True Test Yet to Come for Moonlight Futures Trading

Article excerpt

CHICAGO - Opening night for moonlight futures trading was a smash hit, and the few weeks since then have certainly been respectable. But the true test is yet to come.

``We don't want to draw too many conclusions this early, but so far it's extremely good,'' said Thomas C. Coleman, the Chicago Board of Trade's vice president for economic analysis.

Trading of Treasury bond and note futures, as well as options on those contracts, was expanded by three hours - 7 p.m. to 10 p.m. EDT Monday through Thursday - on April 30.

The point of the evening sessions was to lure more business from Japan and elsewhere in the Far East, which has proven a rich mother lode of investment money for U.S. securities. Evening in Chicago coincides with morning business hours in Tokyo.

While the Japanese Ministry of Finance cooperated by deciding to liberalize the rules governing Japanese investment in U.S. futures markets, those changes have not yet become effective.

Until the Japanese rule changes provide easier access, probably in early June, night trading is operating on something less than all cylinders.

The usual measure of success is how many contracts change hands - the volume of trade - and while this nowhere approaches the level of daytime business, it's much better than what Coleman said was expected.

On opening night, when the U.S. Treasury bond trading pit was as jammed and noisy as any daytime session, better than 40,000 contracts were traded, about 10 times more than what officials said would have been satisfactory.

No one expected an early repeat of this performance - hyped by the presence of television cameras and the opportunity to say, ``I was there, when ...''

Volume of trade since then has averaged fewer than 10,000 and traders on hand number a half or a third of the daytime crew.

These reduced numbers, officials say, suffer in comparison to daytime bond trading, but that's like comparing a no-name rookie to the league leader. The daytime bond pit is the industry leader and is larger than some other entire futures exchanges.

While Coleman's interpretation is upbeat, some others are more subdued. …

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