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OEX LIQUIDITY........SPU LIQUIDITY....possibly too terms that have less
meaning today than even a year ago.
Historically the futures market and the options market have had minimal
overlap amongst users...so cannibalization is often minimal. Plus
remember the biggest customer of the options pit is the futures pit and
vice versa....accordingly unless it is a direct move of customer A from
OEX.....to the futures it shouldn't hurt liquidity. If new players
enter or the same players allocate new dollars then it would be a net
gain for everyone.
Many people believe that new products in either market merely fragment
the community of nonhedgers.
Let me give you an example...the new DOW JONES INDEX products...at CBOE
we will be doing our roadshows accross the country...the CBOT, which
will list the future/futures option will do their kickoff(Proposed) in
the heartland states where they view a futures trading mentality already
exists. I would not want to be either way as to where we all will find
greater acceptance.
Additionally I don't know the regulatory status of the mini S & P filing
and licensing(I think S & P has to approve the new product as well).
Splitting things isn't always a panacea.....look at the XMI. Look at
the NYFE(we now own that option business with the actual closing of the
NYFE......the NYFE trades in Chicago...go figure)it appears to attract a
number of people who can't "afford"` to trade the SPU. Yet if you look
at it's pricing it prices directly off the SPU...accordingly if anything
is negatively impacted I could see the future there being decimated if
the mini SPU works.
It's a real interesting question...the key will be crossover versus new
$$. New $$ everyone wins.
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