Technology was long held at arm’s length by derivatives traders but it proved an unstoppable force. Dan Barnes traces the development of technology in the industry from the birth of electronic trading to today’s multi-asset, global trading systems.
The birth of electronic trading came from an unlikely
source. On October 25 1984, the International Futures
Exchange of Bermuda opened its doors for trading. The
exchange was the brain child of Eugene Grummer, a former
Merrill Lynch futures broker and, despite its ultimate
failure, it set the precedent for the global shift to
electronic trading platforms.
Grummer had wanted to set up shop in the US but was warned
by the Commodity Futures Trading Commission that resistance
from Chicago would inevitably result in years of delays for
approval. Intex was initially formed in 1981 but it would
take three years to come to market.
Initial trading was muted, partly due to the fact that it
had launched with a gold futures contract in a bear market
but also because of hostility from the Chicago floor traders.
Legend has it that threats were made to brokers warning them
not to support the exchange. And so the world’s
first electronic exchange dwindled to nothing.
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