Now that the CBOT has poached half of the daily volume of gold futures, it seems the Commodity Exchange (Comex) is ready to take the plunge and allow electronic trading of metals futures on Globex.
In August, Nymex, Comex’s parent, announced it had reached an agreement in principal with Comex on the issue of electronic trading rights. Comex members would each receive 8,400 shares of Nymex stock, valued at $46 according to a Comex source.
“It’s got a good chance of approval by both memberships,” says Lawrence Bilello, managing partner of BNC Trading and a Comex member. “I kind of look forward to Comex, which has always been the market in metals, finally opening up to the rest of the world.”
Comex members are expected to accept the deal. But the question is whether General Atlantic, the venture capital firm that owns 10% of Nymex, will allow the dilution of its ownership, and if not, whether Nymex seat holders will push back on the deal. Nymex shareholders and Comex members must approve the deal.
A source at the CBOT doubted a deal could be reached in time to stop the shift of liquidity to CBOT. “What will this be, the third time Nymex bought Comex?” asks the source.