CME Will Cross the Pond

The Chicago Mercantile Exchange has decided it will build a derivative exchange in London to go with its futures and options exchanges in Chicago and New York. CME continues to react to the new regulatory structure brought by Dodd-Frank reforms and the needs of its best volume generators. In all, it signals another misstep as exchanges are taking away from their commercial customers, which will not help growth in the long run.

Exchanges such as the Chicago Merc have been in a tough spot since the electronization during the latter part of the last decade abandoned the individual floor trader and the retail customer. In the search for speed and volume, the exchanges have delivered increasing advantages to the high-frequency trader and electronic market maker but, in the process, have destroyed the livelihoods for most individual traders and retail brokerages in commodities. It was that change in futures markets that forced big independent and successful commercial shops such as MF Global to change their profit models in an effort to save them, which instead led ultimately to their demise....384 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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