OneChicago
From MarketsWiki
| OneChicago | |
| |
| Founded | May 14, 2001 |
|---|---|
| Headquarters | Chicago, IL |
| Key People | David Downey, CEO; Thomas McCabe, Chief operating officer; Donald Horwitz, Managing director, General counsel |
| Products | Single Stock Futures |
| Web site | http://www.onechicago.com/ |
OneChicago is a fully electronic exchange owned jointly by Interactive Brokers, CBOE, and CME Group. It is a privately held company and is regulated jointly by the Securities and Exchange Commission and the Commodity Futures Trading Commission.
OneChicago offers single stock futures as a better financing alternative for stock holdings than traditional stock loan costs.[1][2] They offer a stock loan calculator[3]to help investors evaluate their stock financing costs and equivalent single stock futures costs. They also offer an online single stock futures tutorial.[4]
OneChicago uses a Lead Market Maker (LMM) system in which LMMs provide a continuous, two-sided market.[5]
Contents |
Senior Executives
- David Downey, CEO
- Thomas McCabe, Chief operating officer
- Donald Horwitz, Managing director, General counsel
- Mark Esposito, Managing Director of Business Development
Electronic Platform and Clearing
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Security futures at OneChicago are traded on the CBOEdirect electronic trading platform and are cleared through The Options Clearing Corporation or the CME Clearing House. Customers can also trade via an API connection to either CBOEdirect or the CME's Globex platform, which routes the trades to CBOEdirect. All members of the CME Group and CBOE are automatically members of OneChicago.
Trading Volume
During 2006, OneChicago reported record trading volume of nearly eight million security futures contracts, a 43% increase over 2005 total volume of 5.5 million. Average daily volume (ADV) for the year was nearly 32,000 contracts.
Connecting Through a Broker
Investors do not need to be a member of the Exchange to trade at OneChicago. They can access the security futures through a broker, using either a futures account or a securities account. OneChicago is connected to more than 500 firms and has 125 clearing member firms and more than 7,500 individual members. The exchange's web site lists several brokers that connect to OneChicago; however, one can trade through brokers not on the list as well.[6]
Products
Single Stock Futures Contracts
The exchange offers more than 609 security futures, including 589 single stock futures, 8 narrow-based indexes and 12 futures on ETFs. A OneChicago single stock futures contract is an agreement to deliver 100 shares of a specific stock at a designated date in the future, called the expiration date. In most cases, four expiration dates are available for trading OneChicago single stock futures. [7] Unlike most futures contracts, OneChicago's single stock futures settle into physical delivery rather than cash. That means if you are long 10 futures contracts on stock XYZ and you hold your position until delivery, you will receive 1,000 shares of the stock. The price of a single stock futures contract typically closely tracks the price of the underlying stock.
Futures on narrow based equity indexes
Futures on ETFs
- Futures on DIAMONDS®
- Futures on iShares
- iShares FTSE/Xinhua China 25 Index®
- iShares MSCI Brazil Index®
- iShares MSCI Emerging Markets Index®
- iShares Russell 2000 Index®
- Futures on MidCap SPDR Trust Series 1®
- Futures on PowerShares QQQ®
- Futures on SPDR Trust Series 1®
- Futures on SPDR Selects®
Futures on single stocks and ETFs are physically delivered at expiration date. Futures on narrow based indexes are cash settled. The contracts have a margin requirement of 20%. The exchange offers simultaneous trading in up to four contract months.
History
OneChicago was created on May 14, 2001, when the CBOE and CME announced they were forming a for-profit joint-venture exchange to trade single-stock (security) futures. Security futures had previously been outlawed in the U.S. until the passage of the Commodity Futures Modernization Act of 2000 (CFMA). Late in the negotiations between the CME and CBOE, the Chicago Board of Trade agreed to participate with a 10% stake in the joint venture. Because the CBOT joined OneChicago so late in the process, their name did not appear on the banner at the announcement event, and the then- CBOT CEO was not seated at the dais. CME and CBOT merged in July 2007, and are now known as CME Group. On March 16, 2006,[8] OneChicago, LLC announced Interactive Brokers Group LLC, an electronic broker-dealer, had made a significant equity investment in OneChicago.
Board Members
The OneChicago board members include:[9]
- Ann Shuman, Managing Director & Deputy General Counsel, Chicago Mercantile Exchange
- David M. Battan, Vice President & General Counsel, Interactive Brokers LLC
- William J. Brodsky, Chairman and Chief Executive Officer, Chicago Board Options Exchange
- Scot Warren, Managing Director Equity Products, Chicago Mercantile Exchange Inc.
- Richard DuFour, Executive Vice President, Chicago Board Options Exchange
- William C. McGowan, Managing Director, Marketing & Sales, Interactive Brokers LLC
- Thomas Peterffy, Chairman, Interactive Brokers LLC
- Richard H. Redding, Managing Director, Products & Services, Chicago Mercantile Exchange Inc.
See Also
References
- ↑ Trading Strategies. OneChicago. Retrieved on March 28, 2008.
- ↑ Who’s afraid of single-stock futures?. Medill Reports. Retrieved on March 28, 2008.
- ↑ OneChicago Calculator. OneChicago. Retrieved on December 10, 2007.
- ↑ OneChicago Single Stock Futures Tutorial. OneChicago. Retrieved on April 14, 2008.
- ↑ Lead Market Maker (LMM). OneChicago. Retrieved on March 28, 2008.
- ↑ Selected Brokers. OneChicago. Retrieved on April 1, 2008.
- ↑ OneChicago Single Stock Futures. OneChicago. Retrieved on March 26, 2008.
- ↑ INTERACTIVE BROKERS TO MAKE SIGNIFICANT EQUITY INVESTMENT IN ONECHICAGO. OneChicago. Retrieved on December 10, 2007.
- ↑ OneChicago Board of Directors. OneChicago. Retrieved on April 2, 2008.
