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EUREX started life as the DTB, the German futures exchange. The DTB has always been an electronic exchange and started back in 1990, when electronic exchanges were still considered to be inferior to the open outcry system. One of the biggest futures markets in the world is the German Bund, which, during the first half of the 90's, was the biggest contract traded on LIFFE. The Bund pit on the floor of LIFFE was the biggest and the most active, it was the heart of the trading floor. The Bund was also traded on the DTB, but in much smaller quantities. Inevitably, as the electronic market became more stable, more of the Bund business was routed through the DTB. The Bund market was growing all the time, so even though the DTB was taking an increasingly larger share it was not apparent on the floor of LIFFE, as the business there was also increasing. When the share of Bund transactions executed through the DTB reached 50% there was a sudden exodus of trading from LIFFE to the DTB. The Bund pit on the floor of LIFFE all but vanished in just a couple of weeks. The Trading Pit & The Electronic Market 12 |
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