OneChicago LLC

From MarketsWiki
(Redirected from One Chicago)
Jump to: navigation, search
Not impressed? Tell us how to improve it or sign up to edit.
TTLOGO1.gif


OneChicago
OneChicago.gif
Founded May 14, 2001
Headquarters Chicago
Key People David Downey, CEO; Thomas McCabe, Chief Operating Officer;
Products Single-Stock Futures
LinkedIn Profile
Website 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. Interactive Brokers owns 40 percent of the exchange, and CME and CBOE each own 24 percent. The balance of the company is held by management.[1]

OneChicago was ranked as the world's 44th-largest derivatives exchange by volume in 2010, moving up one position from the year before, according to the annual volume survey published by the Futures Industry Association (FIA).[2] The FIA report, published in March of 2011, notes that the exchange's total volume for 2010 was up by 66.6 percent from the previous year, reaching over 4.97 million contracts.

Background

OneChicago offers single-stock futures as a better financing alternative for stock holdings than traditional stock loan costs.[3][4] They offer a stock loan calculator[5]to help investors evaluate their stock financing costs and equivalent single stock futures costs. They also offer an online single stock futures tutorial.[6]

OneChicago uses a Lead Market Maker (LMM) system in which LMMs provide a continuous, two-sided market.[7]

Senior Executives

Electronic Platform and Clearing

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 News

During 2006, OneChicago reported record trading volume of nearly eight million security futures contracts, a 43 percent increase over 2005 total volume of 5.5 million. Average daily volume (ADV) for the year was nearly 32,000 contracts.

In 2009, OneChicago ranked number 45 in 2009 in the FIA's global list of top 53 derivatives exchanges measured by volume, down 25.6 percent on 2008's volume figure.[8] The FIA list, published in early April 2010, reports that that total volume for 2009 fell to 2.98 million from 2008's figure of 4.01 million.

In 2010, OneChicago reported a yearly volume of 4,971,160, up 67 percent from 2009.[9]

During January 2011, OneChicago reported that 166,145 security futures contracts were traded at the exchange.[10]

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 website lists several brokers that connect to OneChicago. However, one can trade through brokers not on the list as well.[11]

Products

Single Stock Futures Contracts

The exchange offers more than 609 security futures, including 589 single stock futures, eight 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. [12] 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 percent. 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 (CBOT) agreed to participate with a 10 percent 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 CBOT CEO at the time was not seated at the dais.

CME and CBOT merged in July 2007, and are now known as CME Group. On March 16, 2006, OneChicago LLC announced that electronic broker-dealer Interactive Brokers Group LLC had made a significant equity investment in OneChicago.[13]

On Nov. 20, 2009, the CFTC and SEC reached an agreement to allow OneChicago to broaden its listings to U.S. investors. According to the agreement, any security that can underlie an option can now also be pegged to a futures contract. The measure also allows futures to underlie certain debt securities that are not registered with the SEC.[14]

On August 18, 2011, OneChicago decided to allow traders to take bearish positions on European stocks in reaction to stricter short-selling rules.[15]

== Board of Directors ==[16]

JLN Managed Futures Video: OneChicago's Mark Esposito

Mark Esposito of OneChicago Discusses Their NoDivRisk (“1D”) Single Stock Futures
Mark Esposito, a 25-year trading veteran on the floor of the Chicago Board Options Exchange (CBOE), is the managing director, business development at OneChicago. John Lothian News Editor-at-Large Doug Ashburn spoke with Esposito about OneChicago’s NoDivRisk (“1D”) Single Stock Futures products and how commodity trading advisors and managed futures funds can use them.Watch at JohnLothianNews.com[17]

John Lothian News Interview:Tom Regazzi

Single Minded: Tom Regazzi of UBS Finds a Niche with Single Stock Futures Interview

Single stock futures in the United States were launched in 2001, but are often forgotten since their big splash introduction twelve years ago on two exchanges. Quietly, however, single stock futures have been growing nicely at OneChicago, the sole marketplace for the instrument. Through the first nine months of 2013, its volumes are up 49 percent, with 6.96 million contracts traded, topping total volumes posted in all of 2012.

This market has also caught the eye of UBS and Tom Regazzi, managing director at the firm’s Global Synthetic Equity department. He spoke with JLN editor-in-chief Jim Kharouf about how UBS uses single stock futures and the potential for the product going forward. [18]

References

  1. The Wallendas Hit Wall Street. Forbes.
  2. 2010 Annual Volume Survey. Futures Industry.org.
  3. Trading Strategies. OneChicago.
  4. Who’s afraid of single-stock futures?. Medill Reports.
  5. OneChicago Calculator. OneChicago.
  6. OneChicago Single Stock Futures Tutorial. OneChicago.
  7. Lead Market Maker (LMM). OneChicago.
  8. 2009 Annual Volume Survey. FIA magazine.
  9. OneChicago Reports December Volume, up 83% over December 2009; Year to date volume up 67%. OneChicago.
  10. {{cite web|url=http://www.onechicago.com/?p=5122%7Cname=OneChicago Reports January Volume|org=OneChicago|date=February 21, 2011}]
  11. Selected Brokers. OneChicago.
  12. OneChicago Single Stock Futures. OneChicago.
  13. INTERACTIVE BROKERS TO MAKE SIGNIFICANT EQUITY INVESTMENT IN ONECHICAGO. OneChicago.
  14. CFTC to Gain Sole Authority Over Eurex Volatility Index. The Wall Street Journal.
  15. OneChicago offers derivatives to counter short ban. MarketWatch.
  16. OneChicago Exchange Management. OneChicago.
  17. Mark Esposito of OneChicago Discusses Their NoDivRisk (“1D”) Single Stock Futures. John Lothian News.
  18. Single Minded: Tom Regazzi of UBS Finds a Niche with Single Stock Futures Interview. John Lothian News.
Personal tools
Namespaces

Variants
Actions
Navigation
John Lothian News
Special Pages
Share
Toolbox