OneChicago was a US-based all-electronic
futures exchange
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or f ...
with headquarters in
Chicago
(''City in a Garden''); I Will
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, Illinois. The exchange offered approximately 12,509
single-stock futures (SSF) products
[http://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
Cboe Global Markets is an American company that owns the Chicago Board Options Exchange and the stock exchange operator BATS Global Markets.
History
Founded in 1973 by the Chicago Board of Trade and member owned for several decades, on March 11, ...
, 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
''Forbes'' () is an American business magazine owned by Integrated Whale Media Investments and the Forbes family. Published eight times a year, it features articles on finance, industry, investing, and marketing topics. ''Forbes'' also re ...
'', March 22, 2006. The other exchange, NQLX (owned by
Euronext.liffe
Euronext N.V. (short for European New Exchange Technology) is a pan-European bourse that offers various trading and post-trade services.
Traded assets include regulated equities, exchange-traded funds (ETF), warrants and certificates, bonds, de ...
), 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]
See also
*
List of stock exchanges
This is a list of major stock exchanges. Those futures exchanges that also offer trading in securities besides trading in futures contracts are listed both here and in the list of futures exchanges.
There are sixteen stock exchanges in the world ...
*
List of stock exchanges in the Americas
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