Chicago is home to several other very innovative exchanges, including OneChicago LLC, the U.S. Futures Exchange, the Chicago Stock Exchange and the Chicago Climate Exchange. OneChicago is an electronic exchange that trades futures on single stocks, narrow based indexes and exchange traded funds (ETFs) and is a joint venture between the CME Group, the CBOE and IB Exchange Corp.
David G. Downey, CEO of OneChicago says, “Customers who are going to buy stock should at least look at the alternatives.” Downey adds that with credit currently so tight, and with leverage being restricted, funds carrying stock on margin can EFP those transactions and maintain their delta position, and in doing so they would free up cash currently tied up in loans and could then use that money to execute additional transactions.
Single stock futures have not been very successful domestically but have seen volume growth overseas, and with the promise of regulatory reform and the threat that one of the successful non U.S. exchanges can list U.S. equity futures, that could change.
The Chicago Stock Exchange (CHX) is the third largest stock exchange in the United States and trades equities listed on the NYSE, AMEX and Nasdaq-listed securities. The exchange is fully demutualized and trades are electronically executed through the CHX Matching System.
Climate Exchange Plc is the parent of the Chicago Climate Exchange (CCX), the Chicago Climate Futures Exchange (CCFE) and the European Climate Exchange (ECX), where they trade emissions, offsets and standardized and cleared futures and options contracts on emission allowances and other environmental products.
At the CCX, members trade credits to reduce six major greenhouse gases. The program is voluntary but legally binding and the intention is to reduce greenhouse gas emissions. Companies that reduce emissions below targets sell credits to those needing them, thus rewarding compliance and raising the cost of emissions. Compliance is verified by the Financial Industry Regulatory Authority (FINRA, formerly NASD). For an in depth look at emissions trading, see “Carbon exchanges gear up,” Trade Trends, March 2008.
