Index
Page numbers followed by “f” denote figures; those followed by “t” denote tables
A
Abbreviations
317–320ACCESS
64–65Acquisitions
Administrative process
85AFFM (Australian Financial Futures Market)
37After-hours electronic trading
57Agent-trading members
45AHL
83–84All Ordinaries
75All Share Index
43Alliances
310–311Alternative trading systems
73American Depository Receipt
142Amsterdam Stock Exchange
106AOR (Automated Order Routing) systems
234Associate Mercantile Market
188–189Aurora
60Australian Securities Exchange
106Automated pit trading
60Automated quotation system
72Automated trading engines
82–83Averbuch, Marty
136AXA Group
107B
B shares
108Back-office processing
7Balls legislation
251Barclays Global Investment
201Basket trading
282Bermuda
33Bid
95Birley, Patrick
42–43Bloomberg terminals
26n12Bocker, Magnus
174Bolsa Electrónica de Chile
71Börse Dubai
174–175BOX (Boston Options Exchange)
267Bragging rights
130Brent futures contracts
215–216Breuer, Rolf
38Busted trades
299Buttonholing
146Buttonwood Agreement of 1792
3C
CAES (Computer Assisted Execution System)
72Canada
197Capital, speculative
129Capitalization-weighted indexes
153n22Capuano, Massimo
173Carey, Charlie
176CATS (Computer-Assisted Trading System)
74–75CBOE (Chicago Board Options Exchange)
Chicago Board of Trade dispute with
115–117demutualization of
115–117description of
21dual trading prohibition by
94electronic system issues at
293–294exercise rights
115–116Futures Exchange
293index options on
137member rights
116–117mergers and acquisitions
162Volatility Option
270CBOEdirect, 88
293CBOT (Chicago Board of Trade)
Aurora system
60Board of Trade Clearing Corporation
132–133Chicago Board Options Exchange dispute with
115–117DTB terminals allowed by
39–40FBI sting operations
100formation of
4futures contracts
156t–157tFutures Exchange
263Ginnie Mae contract
185GLOBEX project and
60–61history of
175initial public offering for
119Japanese markets and
57location movements by
187membership classes in
117modular exchange by
209–210night trading sessions offered by
56–57partnerships by
210–212soybeans contract
156third-party vendors
224n8trading prices of
215CD futures
127–128Central counterparty
8CESR (Committee of European Securities Regulators)
250Chalkboards
11Change Alley
3Chicago Stock Exchange
131Christie, William
72Clearing 21
59Clearing and settlement process
back office participation in
80–81definition of
153n21derivatives
9–10equities
9purpose of
8renovations in
25Clearing services
220–221Clearinghouses
Board of Trade Clearing Corporation
132–133exchanges and
132–135list of
220tOptions Clearing Corporation
133Closed application programming interface
86CME (Chicago Mercantile Exchange)
A shares
111after-hours trading
57Associate Mercantile Market seat sales by
188–189bandwidth requirements
285n13collocation
223–224DTB terminals allowed by
39–40dual listing of
110dual trading prohibition by
94Eurodollar contract of
160–161expansion of
263–266FBI sting operations
100formation of
4global acquisitions by
263–265GLOBEX
seeGLOBEX
gold contracts
126Growth and Emerging Markets division
189growth of
161–162Index and Options Market
189International Monetary Market
188Local Network
223–224location movements by
187membership divisions of
122n17membership value
112–114New York Mercantile Exchange takeover by
50oversight committee at
193product innovations by
183shares
111–112Singapore International Monetary Exchange links with
56S&P 500 futures contract
188trading bans in futures contracts
98trading volume at
160weather contracts
190Coffee and Sugar Exchange
164Collocation
221–223COMEX (Commodity Exchange)
metal futures contract at
184Commodities
description of, in futures contracts
192–193futures contracts
98geographic categorization of
190trading of
3Commoditized markets
256n12Common requirements
251Competition
bragging rights
130in derivatives exchanges
131electronic trading effects on
276–280local
131–132in options
135–138prices affected by
284regional
131–132scope of
228–229in securities exchanges
130–131Competitive growth
125Computers
see alsoElectronic trading; Screen-based exchanges
automated trading using
280–284financial markets affected by
10Consolidation of exchanges
305–308Copenhagen Stock Exchange
106Creative destruction
1–2Credit default swaps
217D
Daily price limit
98Dalian Commodity Exchange
198Damgard, John
134Davies, Howard
253Decimalization
235Demutualization
case study of
110–112of CBOE
115–117description of
239drivers of
102–104electronic trading and
103–104entities created by
108member rights after
108of Nordic exchanges
240of NYMEX
118process of
108transformation process
109–110Demutualized exchanges
definition of
104economic value of
110–112governance of
240–245members in
108ownership of
240–245Department of Justice
134–135Depository receipts
142Derivatives exchanges
competition in
131demutualized
105t–106tinnovations in
202merging of
23–24rank-based listing of
268t–269tscreen-based transition of
stock exchanges vs
109trade bans in
97Direct Edge
74Direct market access
277–278Donovan, Tom
60Dot-coms
12–13Dow Jones index
141DTB (Deutsche Terminböse)
electronic trading at
54London Stock Exchange proposed merger with
172Swiss Options and Financial Futures Exchange merger with
41–42DTCC
311Dual trading
94Duffy, Terry
176E
East India Company
3ECN (Electronic Communication Networks)
advantages of
73–74alternative trading system classification of
73anonymity associated with
73definition of
321execution fees
74types of
73Economies of scale
167Edison, Thomas
178n6Electronic Exchange of Chile
71Electronic exchanges
Australian Financial Futures Market
37benefits of
261–286bids and offers
297challenges for
287–303consequences of
228–229Deutsche Terminböse
Swiss Options and Financial Futures Exchange merger with
41–42Eurex
41–42growth of
200infrastructure of
206launching of new products on
189–191in modular exchange model
207–208New Zealand Futures and Options Exchange
35South African Futures Exchange
42–43Electronic markets
capabilities of
231elements of
230–231history of
245mishaps in
239regulation affected by
229–231Electronic trading
see alsoScreen-based exchanges
advances in
15–16after-hours
57at Australian Stock Exchange
75–76back office
80–81cancellation
239challenges for
287–303competition affected by
276–280data available from
270–275demutualization effects on
103–104direct market access
277–278in energy markets
216errors in
298–299front office
80futures exchanges
283at London Stock Exchange
76middle office
80New York Stock Exchange resistance to
74open application programming interfaces in
86outages
289–293out-trades
298–302regulatory advantages of
75sell-offs caused by glitches in
296–297standardization in
18–20stock exchanges adopting
67t–71tsummary of
76–77at Toronto Stock Exchange
74–75transparency of
287in United States
257n19volume increases secondary to
265–267E-mini S&P 500 stock index futures
59Energy markets
215–217England
131Enron
237–238Equitable
107Equities
clearing and settlement process for
9global competition in
142–143innovations in
200–202options on
135–138Equity exchanges
electronic communication networks’ effect on
73global data regarding
159innovations in
202E*TRADE
136Euronext
outages at
289Euronext NV
50Exchange(s)
clearinghouse and
132–135collaborations among
218–219collocation
221–223consolidation of
305–308elements of
205factors that affect the success of
207“first mover,”
132futures contracts and
128global competition for
23globalization of
262–265governance of
240–245listing of same product by
127–128matching algorithms used by
89–90member-owned
22modular
outages at
289–293proximity to
221purpose of
4regional
10screen-based
size of
23–24transformations of
21–24floor to screen
22implications for
24–25national to global competition
23private club to private company
22–23smaller to larger
23–24virtual
228Exchange groups
264tExchange trading systems
85Exercise rights
115F
“Fast market,”
30FBI sting operations
100Federal model
249–250Fees
130–131Ferscha, Rudolph
145Fill server
84–85Financial capacity
247Financial markets
consolidation in
306dependency among
288future of
312–313technology effects on
10–12transparency of
273Financial settlement
204n13Floor-based trading
consequences of
228–229errors in
7global uses of
9–10launching of new products
186–189limit order
94–95market order
94–95process of
6–7requirements for
81standardization in
19stop order
94–95volume increases
265–266Foreign exchange futures contracts
175FpML (Financial Products Markup Language)
19–20Franke, Jorg
38–39Front running
46n3Fungibility
133–134FutureCom
122n16Futures contracts
Chicago Board of Trade
156t–157tcommodity descriptions in
192–193continent-based distribution f
199fcreation of
192definition of
3–4economic justification for
194exchanges and
128foreign exchange
175global
197–200growth curve of
198as intellectual property
134interest rate
175at international exchanges
159tliquidity
189–190list of
156tlisting cycle for
189metals
184as product innovations
184similarity among
203n2S&P 500
188success of
196–197trading bans
97–98Futures exchanges
captive clearing organizations used by
134electronic trading by
283Taiwan Futures Exchange
141volume measurements at
128–129Futures products
185–186G
Gateways
84–85Ginnie Mae contract
185Global competition
driving forces for
138–139“kill the competitor” approach
144–151regulation affected by
249Global share trading
159GlobalRisk
84GLOBEX
availability to other exchanges
59–60Chicago Board of Trade's reactions to
60–61creation of
57–59currencies on
59description of
22dividends from
58Eurodollars on
59NYMEX outsourcing to
65purpose of
58–59regulatory concerns
231–232trading volume
263GME (Growth and Emerging Markets)
189Gold contracts
126Governance
240–245Greifeld, Robert
173–174H
Hanseatic League
249Hedge funds
160Helsinki Stock Exchange
106Hong Kong Securities and Futures Commission
243Human errors
302Hybrid training system
87–90I
ICCH (International Commodity Clearing House)
35ICE (Intercontinental Exchange)
cash settlement
193clearing service of
221cross-border competition
149energy trading
216International Petroleum Exchange merger with
216New York Mercantile Exchange battle with
148–150IIROC (Investment Industry Regulatory Organization of Canada)
242IMM (International Monetary Market)
188Index and Options Market (IOM)
189Index options
137–138India
mutually owned exchanges in
101–102regional stock exchanges in
131–132Securities and Exchange Board
101Information Age
11Ingves, Stefan
36Instinet
78n22Insurance associations
107Interest rate futures contracts
175Internet
11–13Inverse 2X S&P 500
202IPO (Initial Public Offering)
for Chicago Board of Trade
119definition of
93exchanges with
105t–106tfor New York Mercantile Exchange
119process involved in
119–120Italian Derivatives
21Itayose
43L
Larsson, Per
173Latency
11LCCH (London Commodity Clearing House)
33Lead market maker allocation
89LIFFE (London International Financial Futures Exchange)
39–41, 49, 54–55, 145, 172, 210–212, 218, 221, 265, 291, 311Limit order
94–95Liquidity
13Listing fees
131Local competition
131–132Locals
95Low latency
222–223M
Mahlman, Karsten
60Managed futures
160Mark to market
9Market conglomerates
250–251Market data market language (MDML)
20Market order
94–95Marking to market
153n21Matching algorithms
89–90Matching engine
321Member-owned exchanges
bid-ask spreads
95–96conflicts in
242customer abuses in
101–102customer benefits
100–101decision-making processes in
103democratic structure of
96–97demutualization of
description of
22document explaining futures contracts created by
193–195electronic transition by
55FBI sting operations
100governmental regulation of
100history of
93–94in India
101–102inefficiencies in
103liquidity for new markets
99lobbyists of
97mergers
167product committees in
193public company transformation of
24regulation of
100self-regulation of
100in United States
108–109Mendelsohn, Morris
255Mergers and acquisitions
by Chicago Board Options Exchange
162frequency of
306growth through
161–166interconnectivity created through
263by Japan
162–163London Stock Exchange
172–174management of
167Nasdaq and OMX
174–175new era of
166–177New York Stock Exchange
168–172regulation affected by
249stockholder-owned exchanges in
103summary of
177–178Swiss Options and Financial Futures Exchange and Deutsche Terminböse
41–42Metal futures contract
184Metropolitan Life
107MidAmerican Commodity Exchange
178n5Minneapolis Grain Exchange
4Modular exchange
Chicago Board of Trade
209–210description of
224direct market access and
278EurexUS use of
213exchange formation in
207–208modern
224technology in
217Monetary Authority of Singapore (MAS)
56Monthly Volume Report
203n4Montreal Exchange
251MOS (Mutual Offset System)
56MSCI Taiwan Index
141Multilateral trading facility
307Muscovy Company
3Mutual insurance associations
107N
Nageli, Otto
37NASD (National Association of Securities Dealers)
72Nasdaq (National Association of Securities Dealers Automated Quotations)
as automated quotation system
72bid-ask spreads
72–73computer assisted execution system
72demutualization of
106electronic communication networks’ effect on
73electronic trading platform
209expansion of
74global acquisitions by
74initial public offering by
106Instinet acquisition by
78n22London Stock Exchange proposed merger with
173order-handling rules for
72–73power outage at
290small order execution system
72SuperMontage
72SuperSoes
72volume increases for
267NBBO (National Best Bid and Offer)
235Netting
8Network effects
152New contracts
155–160New users
160–161Newsome, James
134NFA (National Futures Association)
214Nikkei 225
139–141Nikkei 300
140–141Nikkei 225 Mini
159NMS (National Market System)
235“No action letter,”
47n17Novation
8NSC (Nouveau Système de Cotation)
59NYFE (New York Futures Exchange)
152n1NYMEX (New York Mercantile Exchange)
ACCESS system
64–65after-hours electronic trading system at
64–65Chicago Mercantile Exchange takeover of
50clearing systems
238demutualization of
118formation of
4initial public offering for
119intellectual property
193Intercontinental Exchange battle with
148–150London trading floor
65new product listing outsourced by
217NYMEX Holdings
118NYSE (New York Stock Exchange)
competitors of
74electronic trading resistance by
74formation of
3history of
162mergers
168–172power outages at
290public company status purchased by
118–119regulation of
241whole futures subsidiary of
204n7NZFOE (New Zealand Futures and Options Exchange)
35O
Offer
95OM Stockholm Exchange
106OptiMark
89–90Options
by Chicago Board Options Exchange
135competition in
135–138International Securities Exchange listing of
136listing of
203n3Order(s)
in electronic trading
18in floor trading
94–95handling of
235limit
94–95market
94–95smart order routing
284stop
94–95Order management system
322Order server
84Organic growth
at international exchanges
161limitations of
160new contracts
155–160new users
160–161product innovation
156OSF (Osaka Stock Futures)
139OTC (Over-The-Counter) markets
automation of
237Congressional regulation of
71–72definition of
71screen-based trading transition by
71–72Outages
289–293Out-trades
298–302P
Personal computers
10–11Pfauwadel, Gerrard
103–104Philadelphia Options Exchange
293Phone clerks
6Pit traders
45Pit trading
4PMT (Post-Market Trading)
58Porter, William
136Pre-trade risk management
5Price banding limitations
300Price server
84Price-weighted indexes
153n22Principal/agent problem
121n8Pro rata
89Product fungibility
133–134Product innovation
by Chicago Mercantile Exchange
183Commodity Futures Modernization Act effects on
195definition of
184in equities
200–202futures contracts as
184in futures markets
185tfutures products
185–186global
199–200importance of
183launching of new products
on electronic exchanges
189–191liquidity creation
188manpower necessary for
187–188on trading floors
185–186outsourcing of new product listings
217pace of
202–203regulatory change effects on
193–197summary of
202–203Prudential
107Q
Qatar Investment Authority
175R
Rand Merchant Bank
42Real-time data availability
294–298Regional competition
131–132Regulation
federal model of
249–250global competition effects on
249globalization effects on
245–248integration of
251market architecture and
234–239market conglomerates’ effect on
250–251of member-owned exchanges
100mergers and acquisitions effect on
249platforms
235–236screen-based trading effects on
231–234self-regulation
242–243stakeholders in
252–253tiered
236–238Reuters Holding PLC
58ROFEX
161Runners
6Rydex
202S
SAFEX (South African Futures Exchange)
42–43Schultz, Paul
72Screen-based exchanges and trading
see alsoElectronic trading
Australian Financial Futures Market
37definition of
26n22Eurex
41–42International Organization of Securities Commission principles for
231–233in Japan
43–44London Stock Exchange
76Marché A Terme d’Instruments Financiers (MATIF)
50–54New Zealand Futures and Options Exchange
35New Zealand wool traders
34–35over-the-counter markets
71–72regulation affected by
231–234South African Futures Exchange
42–43stock exchanges
66–76Tokyo Grain Exchange
43U.S
55–57SEATS (Stock Exchange Automated Trading System)
75SEBI (Securities and Exchange Board of India)
101SEC (Securities and Exchange Commission)
72Seifert, Weiner
173Self-regulation
242–243Self-trading members
45Session trading
43SETS (Stock Exchange Electronic Trading Service)
76Settlement
Settlement price
204n13SGX
233Shanghai Stock Exchange
71Shenzhen Metals Exchange
44Side-by-side arrangements
87–88Smart order routing
284SOES (Small Order Execution System)
72SOFE
36SOFEX (Swiss Options and Futures Exchange)
15SOFFEX (Swiss Options and Financial Futures Exchange)
description of
37–38Deutsche Terminböse merger with
41–42South Africa
42–43SPDR
201Speculative capital
129Spread trading
283Standardization in trading
18–20Stenhammer, Olof
35–36Stock Exchange of Melbourne
37Stock exchanges
demutualized
105tderivatives exchanges vs
109in India
101screen-based transition of
66–76Stock indexes
139Stockholder-owned exchanges
acquisition of
107–108demutualized exchanges and
104governance of
240–245growth of
125mergers and acquisitions benefits of
103ownership of
240–245Straight through processing
322SuperMontage
72SuperSoes
72Swaps dealers
160Systematic internalizer
257n27T
T + n, 9
TAIEX
141Taiwan Futures Exchange
141T-bonds
33Technology
adoption of
11–12benefits of
24challenges associated with
254competition and
144definitions for
321–322electronic exchanges and
224European Union affected by
14–15financial markets affected by
10–12glitches in
288–294globalization through
262innovations in
29leasing
217–218Telegraph
178n6Tiered regulation
236–238TIFFE (Tokyo International Financial Futures Exchange)
55Time weighted average price
322TOCOM (Tokyo Commodities Exchange)
44Tokyo Stock Exchange
306Tokyo Sugar Exchange
164Top pocket account
75Trade card
7Trade cycle
automation in
16back office
80–81electronic
79–81front office
80illustration of
5fmiddle office
80risk management in
275–276Trade rejection
7–8TradElect
76Trading
basket
282data-based decision making in
270–275definition of
2derivatives
9–10electronic
equities
9floor-based
historical methods of
2information-intensive nature of
11oversight of
273–274principles of
2spread
283styles of
281–282Trading permits
188Trading phase
5Turkish Derivatives Exchange
2702X S&P 500
202U
U.K. Listing Authority
241Universal stock ticker
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