A new study by FOW sister title FOWintelligence has revealed that 52% of new contracts launched in 2011 failed to trade. There are many reasons behind the failures but is a lack of innovation at the heart of the findings?
On the face of it, the finding that over half of new contracts
launch last year failed to trade is pretty shocking. Exchanges
have long acknowledged failings in their ability to predict the
market and generate liquid contracts but a failure rate of one
in two points to significant wasted resources.
However, the rate of failure also represents the changing
environment for exchanges. Before the days of electronic
trading, a new contract launch required an exchange to create a
physical space for the contract to be traded in the pits. This
resulted in significantly less contracts being launched and
significantly more investment being required to launch a new
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