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Chicago Board of Trade Moving to be #1 In Gold Trading.
The Chicago Board of Trade, pleased with growth in its gold and silver contracts, might pursue a broader presence in metals derivatives, company executives said on Thursday.
The No. 2 U.S. futures exchange has built market share with its electronically traded gold contracts by siphoning some volume away from New York's Comex.
"We've had good success and are focusing on broadening that success," Bernard Dan, CBOT's president, said at the Futures Industry Association meeting in Boca Raton, Florida.
The exchange would pursue a "stair-step approach" to expansion to avoid diluting users who have shifted to CBOT or are new to metals trading, he said.
CBOT's gold and silver futures are electronically traded, in contrast to the open-outcry that still rules at the New York exchange, long the dominant force in U.S. precious metals markets.
The electronic platform gives CBOT "a distinct competitive advantage versus Comex," Dan said.
Officials from the New York Mercantile Exchange, parent of Comex, said there were no immediate plans to offer electronic trading in metals during the core U.S. business day.
Volume in the CBOT's metals complex, which includes full-sized and "mini" gold and silver futures, averaged 20,716 contracts a day in February, having started electronic trade near zero in 2003.
In February CBOT gold futures accounted for about 23 percent of listed gold futures traded in North America. Options on CBOT 100-oz gold futures were added this month, a move typically done by exchanges once futures liquidity has reached a critical mass.
Dan said he would not say that the CBOT was close to a "tipping point" in terms of market share, but that the users of its gold contracts were getting "more diverse, much broader."
NYMEX officials expressed little panic. "They're getting a little slice of our pie," Richard Schaeffer, NYMEX vice-chairman, told Reuters. Still, he said, NYMEX was "watching it carefully."
