OneChicago was a US-based all-electronic futures exchange with headquarters in Chicago, Illinois. The exchange offered approximately 12,509 single-stock futures (SSF) productshttp://www.onechicago.com/?page_id=1129 with names such as IBM, Apple and Google. All trading was cleared through Options Clearing Corporation (OCC). The OneChicago exchange closed in September 2020. The exchange was owned jointly by IB Exchange Group (IB), CBOE Holdings, and

CME Group CME Group Inc. (Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, The Commodity Exchange) is an American global markets company. It is the world's largest financial derivatives exchange, and trades in asset class ...

. It was a privately held company that was regulated by both the

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

and the

Commodity Futures Trading Commission The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974 that regulates the U.S. derivatives markets, which includes futures, swaps, and certain kinds of options. The Commodity Exchange Ac ...

History

The Commodity Futures Modernization Act of 2000 legalized U.S. trading in single-stock futures, and two exchanges began operations in November 2002. OneChicago began as a joint venture of the Chicago Board Options Exchange, the

Chicago Mercantile Exchange The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc", or "the Merc") is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an a ...

, and the

Chicago Board of Trade The Chicago Board of Trade (CBOT), established on April 3, 1848, is one of the world's oldest futures and options exchanges. On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form CME Group. CBOT and three other excha ...

.Liz Moyer
"The Wallendas Hit Wall Street"
'' Forbes'', March 22, 2006. The other exchange, NQLX (owned by Euronext.liffe), closed in December 2004 and assigned its remaining contracts to OneChicago. In 2006, IB bought 40% of OneChicago, with Chicago Mercantile Exchange and CBOE each retaining 24% and the remainder belonging to the Chicago Board of Trade and OneChicago management. (The Chicago Mercantile Exchange and the Chicago Board of Trade merged in 2007 to form CME Group.) The OneChicago exchange closed in September 2020.

Operations

Trading Volume

It was reported by OneChicago on January 4, 2016 that 1,476,641 contracts traded in December 2015 for a total 2015 volume of 11,714,015, up 7% from the prior year. This was a new yearly volume record for the exchange, and the third record year in a row.

Electronic platforms and clearing

Delta1 was OneChicago's proprietary order matching and trade reporting platform. On October 20, 2014, Delta1 replaced the OCX.BETS platform for blocks and EFP orders and in January 2015 introduced support for a Central Limit Order Book (CLOB). Members of the CME Group and CBOE were automatically members of OneChicago and any clearing member of the Options Clearing Corporation who was permissioned for Security Futures could also route orders for execution. OneChicago securities futures were traded in either a securities account or a futures account.

Products

Securities Futures Contracts

The exchange offered 13,380 (as of January 20, 2016) security futures, including 2662 futures on

exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...

s and 1846 No Dividend Risk. A OneChicago single stock futures contract was an agreement to deliver 100 shares of a specific stock at a designated date in the future, called the expiration date. OneChicago offers traditional monthly (SSQQ) and weekly expiration cycles. The No Dividend Risk products treat ordinary dividends as corporate events by adjusting the previous days’ settlement price by the dividend amount the morning of the Ex-dividend Date.

Weekly Spreads

An expiring weekly spread is an exchange traded centrally cleared alternative to traditional OTC stock loan and dealer equity repo. If you own stock, buying the expiring weekly spread, (meaning buy the deferred expiration and sell the expiring) closes out your stock position and establishes a long futures position, thus transferring your delta from the stock to the future. Your stock position is closed out by delivering the stock to fulfill your short future obligation the next day while your long position is maintained by your futures position. If the underlying stock is hard to borrow, the hard to borrow premium is reflected in the futures buy price being lower than the stock sale price. In essence, you are synthetically loaning out your stock and collecting the hard to borrow premium. If the underlying stock is general collateral, the repo rate is reflected in the futures buy price being higher than the stock sale price. In essence, you are monetizing your stock and are paying interest on the sale proceeds.

Exchange Future for Physical (EFP)

An Exchange Futures for Physical (EFP) is a combination order to buy (or sell) an amount of underlying stock and simultaneously sell (or buy) the equivalent number of SSFs with a counterparty who buys (or sells) the corresponding underlying (or SSF). EFP trading allows for the trade of a short (or long) underlying position for a short (or long) SSF position. An EFP, as an integrated transaction, has no market exposure risk as the Stock and the SSF have identical delta values. The two parties to the transaction are simply shifting to an equivalent position on more favorable financing terms. As of the close of business on May 14, 2014, OneChicago suspended trading in competitive EFPs. Privately negotiated, off-exchange EFPs may still be transacted by market participants and then reported on OneChicago's Delta1 (formerly OCX.BETS) platform.http://www.onechicago.com/?p=18508

References

{{Reflist

External links

OneChicago - The Single Stock Futures Exchange
Financial services companies established in 2001 Stock exchanges in the United States Financial services companies of the United States Derivatives (finance) 2001 establishments in Illinois Futures exchanges Companies based in Chicago Economy of Chicago