Globex, the automated after-hours futures-trading system owned by Chicago’s futures markets and Reuters PLC, turned a critical corner Friday when Matif, one of Europe’s leading commodity exchanges, traded on the system for the first time and without a hitch.
Gary Ginter, Globex managing director, reported that the computerized system traded an estimated 2,500 interest-rate futures listed on the Matif in the Paris exchange’s first Globex trading session, from 9 a.m. to 3 p.m. Friday. Matif stands for Marche a Terme International du France.
Matif became the first futures exchange other than the Chicago Board of Trade and the Chicago Mercantile Exchange to list products on Globex. The arrival of Matif should give Globex a boost as it struggles to become a credible system.
“I would say that today marks the beginning of a new phase in the life of Globex and of commodity trading generally,” said Ginter.
“For the first time, we have cooperation on an electronic system that has bridged not only two major exchanges, but now two continents.”
The 2,500 transactions in Matif’s so-called PIBOR contract outstripped by 500 the number of contracts traded when Globex was launched June 25 by the CBOT, the Merc and Reuters, the British information-processing giant based in London. PIBOR, an interest-rate hedging tool for commercial banks, stands for “Paris interbank offered rate.”
Matif’s trading session also represented the first time Globex incorporated a second giant host computer into its system, a mainframe owned by Reuters and located in the Docklands area of London. Until Friday the system relied on only one such computer, a Digital Equipment Corp. mainframe in Haupauge, N.Y., to match and process trades, said Ginter.
He said that in a couple weeks, Matif plans to list its long bond, called the 10-year notional, which is one of the leading interest-rate hedging vehicles in Europe and far more popular than the PIBOR. Following that, the Paris market will list its so-called CAC 40, a heavily traded index based on the stocks of France’s leading blue-chip companies.
Ginter said that to date about 400 Globex trading terminals are in place, mostly in the U.S., London and other parts of Europe. The first terminals are scheduled to arrive this month in Tokyo and Hong Kong, markets viewed as essential if Globex is to grow.
Since Globex began, the system has averaged about 2,000 contracts a session, with an occasional rise to 5,000 driven by the perception of world economic volatility.
The CBOT and the Merc have listed all their most popular financial products on the system except for their stock-index contracts, which are to be added soon.
After some technical problems in the beginning, Globex has in recent months been relatively free of glitches.
On typical nights, trading is far from frantic. But proponents of the system say it has proved its worth when unusual volatility has hit markets in the U.S. or abroad.
