U.S. Futures Exchange
Encyclopedia
U.S. Futures Exchange was a Chicago-based, electronic futures exchange
that terminated all exchange operations effective December 31, 2008. On December 17, 2008, MF Global
had announced USFE was for sale or would be closed by December 31, 2008. USFE was originally Eurex US who bought BrokerTec, but applied and received its own futures exchange license from the U.S. Commodity Futures Trading Commission
. In October 2006, Man Group
bought a majority share of Eurex US and rebranded the exchange U.S. Futures Exchange. It has been working to release a set of new products under a strategy of bringing innovation to the 100+ year old derivatives business. The chief executive officer was John Spiegel.
to launch a mini-sized U.S. dollar-denominated DAX(R) futures contract to be launched October 1, 2008. The new contract carried a $10 multiplier, enabling U.S. futures traders access to a leading German stock market index without currency exposure.
On April 18, 2007 USFE launched its first contracts since being re-branded. The first was a Binary Event Future on whether the Chicago Mercantile Exchange
would successfully purchase the Chicago Board of Trade
. The second was similar except on whether the Intercontinental Exchange would purchase the Chicago Board of Trade
. A binary event future settles to 100 if the event occurs and 0 if the event does not occur. The CME-CBOT contract settled on July 13, 2007 to 100 when the Chicago Mercantile Exchange
and the Chicago Board of Trade
completed a merger and became the CME Group
.
On March 14, 2007 USFE announced plans to launch futures based on ISE
indexes. These included the Homebuilders, Gold, SINdex, Revere Natural Gas, and Water Indexes. USFE also announced an exclusive deal with Morningstar
to list futures based on their 16 capitalization and style based indexes on May 23, 2007. On June 28, 2007 USFE announced it would launch a series of renewable energy futures starting with on NORDIX Financial Wind Index futures in seven distinct U.S. regions. All of these futures were due to be released in Q4 of 2007.
On September 21, 2007, USFE announced that it would begin trading Spot Equivalent foreign exchange futures on a 23-hour basis. Spot Equivalent Futures are futures which pay out basis nightly so that the futures contract will price the same as a spot contract in the Foreign exchange market
. However, at the same time, it would trade on a transparent, regulated exchange. The first contracts included Euro
(EUR/USD), British pound (GBP/USD), Japanese yen
(USD/JPY), Australian Dollar
(AUD/USD), Swiss Franc
(USD/CHF), and Canadian Dollar
(USD/CAD).
8.0 developed by Deutsche Borse Systems with an additional market allocation algorithm to incentivize liquidity providers. USFE used the Eurex
network backbone to provide connectivity worldwide.
Futures exchange
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. These types of...
that terminated all exchange operations effective December 31, 2008. On December 17, 2008, MF Global
MF Global
MF Global , formerly known as Man Financial, was a major global financial derivatives broker. MF Global provided exchange-traded derivatives, such as futures and options as well as over-the-counter products such as contracts for difference , foreign exchange and spread betting. MF Global was...
had announced USFE was for sale or would be closed by December 31, 2008. USFE was originally Eurex US who bought BrokerTec, but applied and received its own futures exchange license from the U.S. Commodity Futures Trading Commission
Commodity Futures Trading Commission
The U.S. Commodity Futures Trading Commission is an independent agency of the United States government that regulates futures and option markets....
. In October 2006, Man Group
Man Group
Man Group plc is a British alternative investment management business. It provides a range of funds for institutional and private investors globally. The company manages about US$68 billion and employs around 1,700 people in 15 locations worldwide.Man’s headquarters are at Riverbank House...
bought a majority share of Eurex US and rebranded the exchange U.S. Futures Exchange. It has been working to release a set of new products under a strategy of bringing innovation to the 100+ year old derivatives business. The chief executive officer was John Spiegel.
Products
On September 3, 2008, USFE announced an exclusive licensing agreement with Deutsche BorseDeutsche Börse
Deutsche Börse AG is a marketplace organizer for the trading of shares and other securities. It also is a transaction services provider. It gives companies and investors access to global capital markets. It is a joint stock company and was founded in 1993. The headquarters are in Frankfurt,...
to launch a mini-sized U.S. dollar-denominated DAX(R) futures contract to be launched October 1, 2008. The new contract carried a $10 multiplier, enabling U.S. futures traders access to a leading German stock market index without currency exposure.
On April 18, 2007 USFE launched its first contracts since being re-branded. The first was a Binary Event Future on whether the Chicago Mercantile Exchange
Chicago Mercantile Exchange
The Chicago Mercantile Exchange is an American financial and commodity derivative exchange based in Chicago. The CME was founded in 1898 as the Chicago Butter and Egg Board. Originally, the exchange was a non-profit organization...
would successfully purchase the Chicago Board of Trade
Chicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
. The second was similar except on whether the Intercontinental Exchange would purchase the Chicago Board of Trade
Chicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
. A binary event future settles to 100 if the event occurs and 0 if the event does not occur. The CME-CBOT contract settled on July 13, 2007 to 100 when the Chicago Mercantile Exchange
Chicago Mercantile Exchange
The Chicago Mercantile Exchange is an American financial and commodity derivative exchange based in Chicago. The CME was founded in 1898 as the Chicago Butter and Egg Board. Originally, the exchange was a non-profit organization...
and the Chicago Board of Trade
Chicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
completed a merger and became the CME Group
CME Group
The CME Group bases prices for US gasoline on Brent Crude rather than West Texas Intermediate Crude , which many believe is responsible for artificially high gas prices for US consumers...
.
On March 14, 2007 USFE announced plans to launch futures based on ISE
ISE
ISE may refer to:Organizations:* Information Sharing Environment, established by the U.S. Congress as part of the Intelligence Reform and Terrorism Prevention Act of 2004* Institute for Social Ecology...
indexes. These included the Homebuilders, Gold, SINdex, Revere Natural Gas, and Water Indexes. USFE also announced an exclusive deal with Morningstar
Morningstar, Inc.
Morningstar, Inc. is an independent investment research company based in Chicago, Illinois, USA.-Businesses:Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for...
to list futures based on their 16 capitalization and style based indexes on May 23, 2007. On June 28, 2007 USFE announced it would launch a series of renewable energy futures starting with on NORDIX Financial Wind Index futures in seven distinct U.S. regions. All of these futures were due to be released in Q4 of 2007.
On September 21, 2007, USFE announced that it would begin trading Spot Equivalent foreign exchange futures on a 23-hour basis. Spot Equivalent Futures are futures which pay out basis nightly so that the futures contract will price the same as a spot contract in the Foreign exchange market
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...
. However, at the same time, it would trade on a transparent, regulated exchange. The first contracts included Euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
(EUR/USD), British pound (GBP/USD), Japanese yen
Japanese yen
The is the official currency of Japan. It is the third most traded currency in the foreign exchange market after the United States dollar and the euro. It is also widely used as a reserve currency after the U.S. dollar, the euro and the pound sterling...
(USD/JPY), Australian Dollar
Australian dollar
The Australian dollar is the currency of the Commonwealth of Australia, including Christmas Island, Cocos Islands, and Norfolk Island, as well as the independent Pacific Island states of Kiribati, Nauru and Tuvalu...
(AUD/USD), Swiss Franc
Swiss franc
The franc is the currency and legal tender of Switzerland and Liechtenstein; it is also legal tender in the Italian exclave Campione d'Italia. Although not formally legal tender in the German exclave Büsingen , it is in wide daily use there...
(USD/CHF), and Canadian Dollar
Canadian dollar
The Canadian dollar is the currency of Canada. As of 2007, the Canadian dollar is the 7th most traded currency in the world. It is abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies...
(USD/CAD).
Trading Platform
USFE was a fully electronic exchange. Its last platform release, USFE 1.0, was based on EurexEurex
Eurex is one of the world's leading derivatives exchanges, providing European benchmark derivatives featuring open and low-cost electronic access globally...
8.0 developed by Deutsche Borse Systems with an additional market allocation algorithm to incentivize liquidity providers. USFE used the Eurex
Eurex
Eurex is one of the world's leading derivatives exchanges, providing European benchmark derivatives featuring open and low-cost electronic access globally...
network backbone to provide connectivity worldwide.