International Developments in Futures and Options

Kelong YanBA 543

May 18, 2011

Roadmap

• The Origin• Modern Exchange Markets• Markets in Developed and Developing

Countries– LIFFE– CBOT & CBOE– China

• Supplement: Trading Floor Evolution– Modern vs. Historical

The Origin of Futures & Options

Ancient Greece& Rome

12th Century: The Royal Exchange opened in 1571

Modern Futures and Options

Started at The Chicago Board of Trade ( CBOT) in 1848

• Major sorts of Futures & Options

Major Exchanges Worldwide

• Over 75 Exchanges (refer to next page)

• LIFFE, CBOT and exchanges in China

International Options and Futures Markets

Buenos Aires Cereal Exchange

Mercado Abierto Electronico SA

Rosario Board of Trade

Buenos Aires Futures Market

Merfox

Rosario Futures Exchange

Australian Derivatives Exchange

Asian Capacity Exchange

Sydney Futures Exchange

Securities Exchange of Barbados

Bahia, Sergipe, Alagoas Stock Exchange

Brazilian Futures Exchange

Pernambuco and Paraiba Stock Exchange

Minas, Espirito Santo, Brasilia Stock Exchange

The Commodities & Futures Exchange

Sofia Commodity Exchange

Montreal Exchange

Canadian Venture Exchange

Winnipeg Commodity Exchange

Bolsa Electronica de Chile

China Zhengzhou Commodity Exchange

Guandong United Futures Exchange

Shanghai Cereals and Oils Exchange

Beijing Commodity Exchange

Wuhan Securities Exchange Centre

Hong Kong Futures Exchange

Shenzhen Mercantile Exchange

China-Commodity Futures Exchange, Inc of Hainan

Finnish Options Exchange

Helsinki Exchanges

MONEP

MATIF

Deutsche Terminborse

Athens Derivatives Exchange

Chinese Gold and Silver Exchange Society

Budapest Commodity Exchange

Madhya Pradesh Stock Exchange

The OTC Exchange of India

Capital Market Supervisory Agency

Indonesian Commodity Exchange Board

Italian Derivatives Market

Italian Financial Futures Market

Tokyo Commodity Exchange

Maebashi Dried Cocoa Exchange

Osaka Textile Exchange

Kobe Raw Silk Exchange

Kobe Rubber Exchange

Nagoya Textile Exchange

Osaka Securities Exchange

Tokyo Grain Exchange

Tokyo International Financial Futures Exchange

Niigata Securities Exchange

Japan Securities Dealing Association

Kammon Commodity Exchange

Kansai Agricultural Commodities Exchange

Cubu Commodity Exchange

Sapporo Securities Exchange

Yokohama Raw Silk Exchange

Amman Financial Market

The Kuala Lumpur Options & Financial Futures Exchange

Malaysia Derivatives Exchange

Commodity and Monetary Exchange of Malaysia

Mexican Derivatives Exchange

AEX-Agricultural Futures Exchange

AEX-Options Exchange

Financiele Termijnmarkt Amsterdam NV

New Zealand Futures & Options Exchange Ltd

Muscat Securities Market

Manila International Futures Exchange

Warsaw Commodity Exchange

Oporto Derivatives Exchange

Romanian Commodities Exchange

Sibiu Monetary-Financial and Commodities Exchange

Moscow Interbank Currency Exchange

Russian Exchange

St Petersburg Futures Exchange

Moscow Commodity Exchange

Saudi Arabian Monetary Authority

Singapore Commodity Exchange Ltd

Singapore International Monetary Exchange Ltd

Commodity Exchange of Ljubljana

South African Futures Exchange

Spanish Options Exchange

Citrus Fruit and Commodity Market of Valencia

Spanish Financial Futures Market

The Swedish Futures and Options Market

Swiss Options & Financial Futures Exchange AG

Swiss Exchange

London International Futures & Options Exchange

The Baltic Exchange

London Metal Exchange

The London Securities and Derivatives Exchange

International Petroleum Exchange of London Ltd

Tradepoint Investment Exchange

History of Mergers

• Chicago Mercantile Exchange +Chicago Board of Trade = CME Group

• CME Group merged with NYMEX

• NYSE Euronext bought LIFFE

CBOT &CBOE

1848: COBT created 1864:the 1st ever standardized

"exchange traded" forward contracts 1973: CBOT created the CBOE(the

Chicago Board Options Exchange )2007, CBOT merged, and formed CME GROUP

London International Financial Futures and Options Exchange (LIFFE)

• 1982: LIFFE founded• 1993: LIFFE merged with LTOM(London

Traded Options Market )• 1996: It merged with the London

Commodity Exchange (LCX), and became Europe’s biggest futures exchange

• By 1998: LIFFE lost market power, why?

LIFFE

• 1998: Move to electronic trading, LIFFE CONNECT created

• 2002: LIFFE was acquired by Euronext, power recoverd

Chinese Exchanges

• China–1990 Futures Market established

why it was so late?

–1992 CSRC (China’s Securities Regulatory Commission)

–Future Opportunities

Trading Floor Evolution• Modern Style

Electronic Platform– Speed– Cost– Stability

Historic StyleTraditional Open Outcry

– Intangible value– Excitement

&Speed– Source of Revenue

and Cost

VS

Conclusion

• Roles of futures & options in financial world

• Development Trend

Growth of Futures/Options

Conclusion

• Issues & Risks of exchanges around the world

References

• http://en.wikipedia.org/wiki/Chicago_Board_of_Trade• http://en.wikipedia.org/wiki/London_International_Financial_Futures_and_Options_Exchange• http://fpc.org.uk/articles/127• http://www.marketwatch.com/story/cme-group-nymex-in-merger-talks• http://www.cmegroup.com/company/history/magazine/Summer2007/LongTimeComing.html• http://www.marketswiki.com/mwiki/History_of_Futures_in_China• http://freephotooftheday.com/category/currency/• http://worldpayment-solutions.com/images/images/iStock_000002620177Large(1).jpg