International Development of Futures and OptionsOverviewFLEX and Exotic OptionsSlide 4Developed MarketsDeveloped Markets (cont.)Developing MarketTrading Floor MovementConclusionQuestions?International Development International Development of Futures and Optionsof Futures and OptionsInternational Development International Development of Futures and Optionsof Futures and OptionsKaryn YamamuraKaryn YamamuraBA 543BA 543May 26, 2005May 26, 2005OverviewOverviewOverviewOverviewFLEX and Exotic OptionsFLEX and Exotic OptionsDeveloped and Developing MarketsDeveloped and Developing MarketsEuropeEuropeChinaChinaTrading Floor MovementTrading Floor MovementElectronic vs Open OutcryElectronic vs Open OutcryFLEX and Exotic OptionsFLEX and Exotic OptionsFLEX and Exotic OptionsFLEX and Exotic OptionsFlexible Exchange Options (FLEX)Flexible Exchange Options (FLEX)1993 CBOT1993 CBOTCustomizationCustomizationExotic OptionsExotic OptionsAverage Rate (a.k.a. Asian Rate) OptionAverage Rate (a.k.a. Asian Rate) OptionBarrier OptionBarrier OptionKnock-outKnock-outKnock-inKnock-inBasket OptionBasket OptionInternational Options and Futures MarketsBuenos Aires Cereal Exchange Mercado Abierto Electronico SARosario Board of Trade Buenos Aires Futures Market Merfox Rosario Futures Exchange Australian Derivatives ExchangeAsian Capacity Exchange Sydney Futures Exchange Securities Exchange of Barbados Bahia, Sergipe, Alagoas Stock Exchange Brazilian Futures ExchangePernambuco and Paraiba Stock Exchange Minas, Espirito Santo, Brasilia Stock ExchangeThe Commodities & Futures Exchange Sofia Commodity ExchangeMontreal Exchange Canadian Venture Exchange Winnipeg Commodity Exchange Bolsa Electronica de Chile China Zhengzhou Commodity Exchange Guandong United Futures ExchangeShanghai Cereals and Oils Exchange Beijing Commodity ExchangeWuhan Securities Exchange Centre Hong Kong Futures Exchange Shenzhen Mercantile Exchange China-Commodity Futures Exchange, Inc of HainanFinnish Options Exchange Helsinki ExchangesMONEPMATIFDeutsche Terminborse Athens Derivatives Exchange Chinese Gold and Silver Exchange Society Budapest Commodity ExchangeMadhya Pradesh Stock Exchange The OTC Exchange of India Capital Market Supervisory Agency Indonesian Commodity Exchange Board Italian Derivatives Market Italian Financial Futures MarketTokyo Commodity Exchange Maebashi Dried Cocoa Exchange Osaka Textile Exchange Kobe Raw Silk Exchange Kobe Rubber ExchangeNagoya Textile Exchange Osaka Securities Exchange Tokyo Grain ExchangeTokyo International Financial Futures Exchange Niigata Securities ExchangeJapan Securities Dealing Association Kammon Commodity Exchange Kansai Agricultural Commodities Exchange Cubu Commodity Exchange Sapporo Securities Exchange Yokohama Raw Silk ExchangeAmman Financial Market The Kuala Lumpur Options & Financial Futures ExchangeMalaysia Derivatives Exchange Commodity and Monetary Exchange of Malaysia Mexican Derivatives ExchangeAEX-Agricultural Futures Exchange AEX-Options ExchangeFinanciele Termijnmarkt Amsterdam NV New Zealand Futures & Options Exchange LtdMuscat Securities Market Manila International Futures Exchange Warsaw Commodity Exchange Oporto Derivatives ExchangeRomanian Commodities ExchangeSibiu Monetary-Financial and Commodities ExchangeMoscow Interbank Currency Exchange Russian Exchange St Petersburg Futures ExchangeMoscow Commodity Exchange Saudi Arabian Monetary Authority Singapore Commodity Exchange Ltd Singapore International Monetary Exchange LtdCommodity Exchange of Ljubljana South African Futures Exchange Spanish Options ExchangeCitrus Fruit and Commodity Market of Valencia Spanish Financial Futures Market The Swedish Futures and Options Market Swiss Options & Financial Futures Exchange AG Swiss Exchange London International Futures & Options Exchange The Baltic Exchange London Metal Exchange The London Securities and Derivatives ExchangeInternational Petroleum Exchange of London Ltd Tradepoint Investment ExchangeDeveloped MarketsDeveloped MarketsDeveloped MarketsDeveloped MarketsEurope - LondonEurope - LondonHas some of the most developed and widely Has some of the most developed and widely used Futures and Options Marketsused Futures and Options MarketsEurexEurexEuronext.liffeEuronext.liffeOMX OMX ConsolidationConsolidationElectronic trading systemElectronic trading systemDeveloped Markets (cont.)Developed Markets (cont.)Developed Markets (cont.)Developed Markets (cont.)Euronext.liffeEuronext.liffeEuronext established in 2000Euronext established in 2000LIFFELIFFE ( (London International Financial Futures ExchangeLondon International Financial Futures Exchange))LIFFE ConnectLIFFE ConnectEuronext.liffe is creating a single market Euronext.liffe is creating a single market for derivatives, by bringing all its for derivatives, by bringing all its derivatives products together on a single derivatives products together on a single electronic trading platform electronic trading platform Future Future ConsolidateConsolidateAcquire London Stock ExchangeAcquire London Stock ExchangeDeveloping MarketDeveloping MarketDeveloping MarketDeveloping MarketChinaChina1500 to 1978 country faced war, poverty, corruption1500 to 1978 country faced war, poverty, corruptionProhibited foreign investment Prohibited foreign investment 1978 opened economy to outsiders1978 opened economy to outsiders1990 Futures Market established1990 Futures Market establishedCorruptCorruptPlagued with insider trading, scandals, fraud, etcPlagued with insider trading, scandals, fraud, etcMany Markets closedMany Markets closed1992 CSRC (China’s Securities Regulatory Commission)1992 CSRC (China’s Securities Regulatory Commission)Similar to the SEC (Securities and Exchange Commission)Similar to the SEC (Securities and Exchange Commission)Enforce regulationsEnforce regulationsFuture OpportunitiesFuture OpportunitiesOne of the world’s leading countries in natural resources, One of the world’s leading countries in natural resources, population, and landpopulation, and landFutures market limited to domestic financial institutionsFutures market limited to domestic financial institutionsOptions marketsOptions marketsTrading Floor MovementTrading Floor MovementTrading Floor MovementTrading Floor MovementTraditional Open OutcryTraditional Open OutcrySentimental valueSentimental value150 year history in
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