The birth of financial futures
198 1 year, Chicago Mercantile Exchange (CME) took the lead in introducing the concept of cash settlement into futures trading, thus opening the door to modern futures and options trading.
Prior to this, the liquidation of futures contracts must be linked to physical delivery, which restricted the participants in the futures market, and only those investors who had physical delivery corresponding to the contract could participate in the transaction. The cash settlement system has lifted this restriction, providing a broad development prospect for futures trading, and all the major exchanges in the world have joined the ranks of a piece of the action. More importantly, the introduction of cash settlement system enables exchanges to launch index trading products and provide hedging tools for the decline of the stock market, which has always been a long-term dream of many exchanges and investors.
Leo LeoMelamed, honorary chairman of CME, said: "When there is no financial futures, there are only agricultural products (1 1.70, 0.00, 0.00%) futures in the market, so it is difficult for such a market to grow and develop. The introduction of financial futures contracts provides a new development prospect for the world futures market. Another revolutionary event is the introduction of cash settlement system, which opens a new era of futures trading. After the restrictions of the physical delivery system are broken, there will be no institutional obstacles to the development of futures trading. "
Surprisingly, the smaller KansasBoardofTrade launched the index futures contract for the first time, and on February 24th, 1982, the world's first index futures contract, the value line index futures contract, started trading.
Two months later, CME launched the International Petroleum Exchange (20065438+0), and signed an agreement with Singapore Financial Futures Exchange to trade Brent crude oil futures contracts. The London International Financial Futures Exchange cooperates with the Tokyo International Financial Futures Exchange to trade European yen contracts.
The launch of 1992 global electronic trading platform has greatly accelerated the cooperation process between exchanges and enabled CME to rapidly expand the geographical scope of its business. At this time, the emergence of independent software vendors (ISV) makes the contact between the various departments within the exchange closer, thus ending the first wave of global exchange cooperation.
Stock exchange reform
Initially, stock and derivative exchanges were all composed of members, and they were non-profit organizations owned and managed by members. The advantage of this model is that members can control the business of the exchange. The trading seats of the exchange are stable assets, which can be transferred or passed down from generation to generation when members quit. The exchange can strictly control the membership structure and the business of the exchange is also protected. However, this model is inefficient. MichaelGorman and NidhiSingh described the wonderful prospect of their imagined futures and options exchange, that is, the electronic exchange-the global exchange changed from Hall trading to bit transmission. In the past, the traditional ownership of exchanges "meant that the status of exchange members was higher than that of investors". In addition, traditional exchanges need to rise to meet the challenges of electronic exchanges and share the benefits brought by the globalization of exchange business, both of which require a lot of capital investment.
1985, Olaf Sternhamma founded the non-profit Swedish options exchange, which was a pioneer in the shareholding system reform of the exchange. 1993, the exchange made an initial public offering (IPO). Other European stock exchanges, such as the Italian Stock Exchange (BorsaItaliana), were also advocates of the earlier shareholding system reform. From 65438 to 0997, AmsterdamStockExchange carried out the shareholding system reform. In 2000, the London Stock Exchange, Deutsche B? rse and Euronext also carried out reforms one after another.
Similarly, Australian Stock Exchange (1998), Singapore Stock Exchange (1999) and Nasdaq all carried out shareholding system reform in 2000. By 200 1, most exchanges in Japan have also been transformed into profit-making institutions. After the end of that decade, this shift became a global trend.
The reform of the pure derivatives exchange is half a beat slow. TheAthensExchange is the first pure derivatives exchange to complete the shareholding system reform, and the time is 1999. The London Metal Exchange (LME) carried out the shareholding system reform in 2000. The first American exchange reform was CME, which started in 2000 165438+ 10/2 and lasted for two years.
Melamed believes that CME's shareholding system reform was carried out under the pressure of the market: "By the end of the 1990s, it was obvious that in order to establish various electronic systems to cope with global competition, exchanges needed a lot of money."
"In the past 90 years, it was difficult for us to trade 6,543,800 contracts per year, but now the average daily trading volume is about 6,543,800 contracts+5,000 contracts. Electronic transactions make this possibility a reality. We need a lot of money to compete, and the only way to get money is IPO. We also know that in order to adapt to global competition, we must speed up decision-making, and the organizational structure of an exchange composed of hundreds of members is not conducive to improving competitiveness. "
However, the shareholding system reform also has costs. The management of CME has signed an agreement with the member units of the exchange. If members agree to the shareholding system reform, the exchange must ensure that the open outcry trading market is maintained and cannot increase the settlement fee for open outcry trading. Only with the consent of the members can the existing open outcry trading contracts be traded electronically.
However, in other exchanges in the United States, the reform action has not progressed so fast. The shareholding system reform of CBOE has been plagued by legal disputes. The focus of the debate is the position of CBOT in the shareholding system reform. CBOT insists that CBOE was established at their proposal, so they should hold part of the shares. In 2007, after the merger of CBOT and CME, CBOT's requirements were reduced accordingly, because CME announced that it would waive all claims.
On 20 10, CBOE finally made a successful initial public offering. WilliamBrodsky, Chairman and CEO of CBOE, said that the shareholding system reform and the subsequent initial public offering were "the biggest challenges in his career".