Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

brownsfan019

Intercontinental Exchange wins trading rights for Russell equity indexes

Recommended Posts

http://www.chicagotribune.com/business/chi-tue_ice0619jun19,1,5526876.story?ctrack=1&cset=true

 

Merc loses futures to ICE

Russell move may affect CBOT battle

 

By Robert Manor

Tribune staff reporter

Published June 19, 2007

 

The IntercontinentalExchange Inc., which is attempting a merger with the Chicago Board of Trade, said Monday it had won the exclusive right to trade a well-known group of equity index futures previously traded mainly on the Chicago Mercantile Exchange, a move that could weaken the Merc's competing merger bid for CBOT.

 

The ICE announcement involves the Russell Investment Group's two popular stock indexes of large and smaller capitalization stocks. Such index futures products have grown increasingly popular in recent years.

 

Patrick O'Shaughnessy, an equity analyst with Morningstar, said ICE's win of the contracts will serve two purposes. One is to diversify its offerings, which now are mainly energy and commodities such as sugar and cocoa, to include the increasingly fast-growing universe of financial futures.

 

It is also to strengthen ICE's bid to merge with the CBOT, a merger also sought by the Merc. "The ICE platform will offer investors worldwide exclusive access to Russell's unparalleled group of equity indexes," said Jeffrey Sprecher, the chief executive of ICE.

 

"They want people to see that they are here to stay and that they are a big player," O'Shaughnessy said. "It certainly brings ICE some credibility."

 

Russell equity indexes have been trading with the Merc since 1992, the company said, although some Russell products trade on the New York Board of Trade, which was recently acquired by ICE.

 

A spokesman for the Merc played down the loss of the Russell indexes. "Russell products make up only 1.5 percent of the total CME equity standard products, which means out of the 6 million contracts we do each day it's below half a percent of total volume," said Allan Schoenberg, director of corporate communications for the Merc.

 

Even backers of the Merc's bid for CBOT said the loss of the Russell indexes will have some impact on CBOT shareholders, who are to vote on the merger issue July 9.

 

"It will have a lot of shock value," to the Merc, said Alan Palmer, an independent trader at the CBOT. But he said that, in the long run, Merc's offer for CBOT is still more attractive than that of ICE.

 

The Russell Investment Group has developed a number of stock indexes intended to measure how different types of stocks are performing.

 

Russell licenses the use of the name for the indexes.

 

Kelly Haughton, strategic director for Tacoma, Wash.-based-Russell, could not give an exact timetable for when trading in the index futures would migrate from the Merc to ICE.But Haughton said ICE could win the right to trade other Russell equity indexes.

Share this post


Link to post
Share on other sites

I know there are some ER2 traders here, so make sure you follow how this progresses and what changes you need to make in order to keep trading the ER2 when it's at the ICE.

 

Coincidentally, the CME had an announcement as well:

 

CME and S&P Announce New E-mini Small Cap Stock Index Futures Contracts

Chicago Mercantile Exchange MediaRoom - News Releases

 

 

Hmmmm.... A small cap E-mini... why would they do that? ;)

 

My guess is that this new E-mini coupled with a S&P 400 E-mini push, the CME is hoping to keep ER2 traders there. Problem is that the new e-mini is just that, new, and the S&P 400 has yet to get some good volume. Time will tell.

Share this post


Link to post
Share on other sites

I trade the ER2 almost exclusively. Thanks for posting this info Brownsfan. Now I'm thinking additional real time feed and possible liquidity issues initially. Why can't they just leave well enough alone . . .

Share this post


Link to post
Share on other sites
I trade the ER2 almost exclusively. Thanks for posting this info Brownsfan. Now I'm thinking additional real time feed and possible liquidity issues initially. Why can't they just leave well enough alone . . .

 

It's all about the benjamins baby. :D

 

I wonder what the Russell 'company' gets from this kind of stuff. The exchange is buying a license basically and you know the CME probably fought hard to keep it there.

Share this post


Link to post
Share on other sites

Sandler O'Neill research report on the news:

 

 

04:09pm EDT 19-Jun-07 Sandler O'Neill & Partners LP (Richard Repetto, CFA) CME

Sandler: CME: The Response to the Russell Movement

 

 

Sandler O'Neill + Partners, L.P. EQUITY RESEARCH

Company Note

------------------------------------------------------------------------------

 

Chicago Mercantile Exchange NYSE: CME - $545.99

eFinance RATING: BUY

12-Month Price Target: $630.00

-------------------------------------- ---------------------------------------

 

June 19, 2007

 

Richard Repetto, CFA, Principal

212-466-7906

rrepetto@sandleroneill.com

 

Betsy Miller, Vice President

212-466-7962

bmiller@sandleroneill.com

 

Christopher R. Donat, Associate Director

212-466-8068

cdonat@sandleroneill.com

The Response to the Russell Movement

----------------------------------------------------------------------------

 

EPS

Estimate

Mar Jun Sep Dec Year Growth Change P/E

------- ------- ------- ------- -------- -------- -------- -------- --------

2006A $2.61 $3.12 $2.95 $2.91 $11.60 31.7% -- 47.1x

2007E $3.69A $3.53 $3.68 $3.86 $14.76 27.2% -- 37.0x

2008E $4.26 $4.71 $4.50 $4.63 $18.10 22.6% -- 30.2x

 

* CME announces its competitive response to ICE's acquisition of Russell

Index rights. This morning, CME announced an expansion of its agreement

with Standard & Poors to include E-mini futures on the Small Cap S&P

Indexes. After CME's license to trade the Russell indices expires in

September 2008, CME stated that it would incent traders to transfer their

open interest from CME Russell 2000 futures to the new CME/S&P E-mini Small

Cap contracts.

* CME can trade Russell index futures until September 2008. We learned from

CME management today that the company has a license to trade Russell index

futures until September 2008, although ICE can trade it concurrently for

just over a year. Once ICE obtains Hart-Scott-Rodino approval, which should

be in roughly 30 days, it can begin trading the Russell.

* The product versus the platform. We will have to take a "wait and see"

approach as to where liquidity shifts for small cap E-mini indexes. The

pros for ICE (the product) include large funds that are specifically

indexed to the Russell. The pros for CME (the platform) include its

technology, clearinghouse and cross-margining benefits with CBOT contracts.

* Exclusive rights have not driven market for CME's main contracts. YTD in

2007, Eurodollar futures have accounted for 56% of CME's daily volume, and

CME has no exclusive trading agreement for those. FX products have

accounted for another 9% of CME's volume, and it has no exclusive licenses

for those contracts either. The takeaway here is that there is more to

driving volume than the exclusive right to trade a contract.

* June-to-date volumes are tracking above expectations. In June-to-date, CME

has traded an average of 8.73 million contracts per day, up 43.8%

sequentially. We note the early part of the month included the roll, and we

believe volume will drop off somewhat in the second half of June. Still,

over the last two years, the second part of June has been down 25.0% and

26.2% from the first part. Our 2Q07 estimate of 6.07 million contracts per

day implies the second part is down 41.9% from the first part. With open

intererst also at record levels in the roll cycle, we believe there is

upside potential to our 2Q07 EPS estimate of $3.53. The consensus is at

$3.56.

* Maintaining BUY rating. We are maintaining our BUY rating and our price

target of $630, which is based on a 30x multiple of our 2008 pro forma

earnings power EPS estimate of $19.87. We also add $30 for the discounted

value of the $0.88 we estimate that CME Reuters FXMarketSpace initiative

will earn in 2009.

Share this post


Link to post
Share on other sites
How far back?

 

Depends on what format you want (minute, tick, etc.) and if you are plugging that data into the OEC trader or another platform like MC. The minute data appears to go back pretty far on it's own w/o requesting more data.

 

The guys at OEC are good guys and if you ask nicely, you just might be able to get even more data. ;)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • ELV Elevance Health stock, watch for an upside gap breakout at https://stockconsultant.com/?ELV
    • ORLY OReilly Automotive stock, nice top of range breakout, from Stocks to Watch at https://stockconsultant.com/?ORLY
    • Date: 28th March 2025.   Market Selloff Deepens as Tariff Concerns Weigh on Investors     Global stock markets extended their losing streak for a third day as concerns over looming US tariffs and an escalating trade war dampened investor sentiment. The flight to safety saw gold prices surge to a record high, underscoring growing risk aversion. Stock Selloff Intensifies The MSCI World Index recorded its longest losing streak in a month, while Asian equities saw their sharpest decline since late February. US and European stock futures also signalled potential weakness, while cryptocurrency markets retreated and bond yields edged lower. Investors are scaling back their exposure ahead of President Donald Trump’s expected announcement of ‘reciprocal tariffs’ on April 2. His latest move to impose a 25% levy on all foreign-made automobiles has sparked fresh concerns over inflation and economic growth, prompting traders to reassess their strategies. Investor Strategies Shift Market experts are adjusting their portfolios in anticipation of heightened volatility. ‘It’s impossible to predict Trump’s next move,’ said Xin-Yao Ng of Aberdeen Investments. ‘Our focus is on companies that are less vulnerable to tariff policies while taking advantage of market dips to find value opportunities.’ Yield Curve Signals Economic Concerns In the bond market, the spread between 30-year and 5-year US Treasury yields widened to its highest level since early 2022. Investors are bracing for potential Federal Reserve rate cuts if economic growth slows further. Long-term Treasury yields hit a one-month peak as inflation risks tied to tariffs spurred demand for higher-yielding assets. Boston Fed President Susan Collins noted that while tariffs may contribute to short-term price increases, their long-term effects remain uncertain. Gold Hits Record High as Safe-Haven Demand Rises Amid market turbulence, gold prices soared 0.7% on Friday, reaching an all-time high of $3,077.60 per ounce. Major banks have raised their price targets for the precious metal, with Goldman Sachs now forecasting gold to hit $3,300 per ounce by year-end. Looking Ahead As investors digest economic data showing US growth acceleration in Q4, attention will turn to Friday’s release of the personal consumption expenditures (PCE) price index—the Federal Reserve’s preferred inflation measure. This data will be critical in shaping expectations for future Fed policy moves. With markets on edge and trade tensions escalating, investors will closely monitor upcoming developments, particularly Trump’s tariff announcement next week, which could further dictate market direction.   Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Andria Pichidi HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Crypto hype is everywhere since it also making new riches as well, i however trade crypto little as compared to other forex trading pairs.
    • The ewallets can be instant withdrawals like skrill etc or they can also pay through crypto but not tested their crypto withdrawals so far.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.