The Chicago Mercantile Exchange (CME Group) is protecting its turf when it comes to trading currencies as other exchanges amp up their currency offerings — both the Philadelphia Board of Trade (PBOT) and the Tokyo Financial Exchange (TFX) came out with currency news at the end of August.
The CME Group, which is a regulated marketplace for foreign exchange trading, announced it plans to offer electronic trading for weekly forex options on futures with American-style expiration. As of Sept. 10, the weekly options on the following currencies will be available virtually 24 hours a day on the CME Globex electronic trading platform: the Euro, the Japanese yen, the British pound, the Swiss franc, the Canadian dollar and the Australian dollar.
This move comes just about one week after the PBOT launched four new World Currency Futures (WCF) covering the Australian dollar, the Canadian dollar, the Japanese yen and the Swiss franc. Previously the PBOT had launched WCF on the pound and the euro.
And at the end of August the TFX announced it plans to invest about ¥8.5 billion ($73 million) in a currency trading system in the coming year, seeking to grab market share from online brokers.
The platform will allow investors to trade Asian currencies versus the yen as well as the dollar against the euro and British pound. And while it seems there are plenty of places to go to trade forex, exchanges and firms are delving into forex options for an advantage.
And while it seems many new players are jumping in or adding on to get their share of business from forex, it is forex options where players will get the advantage because there are fewer places that offer forex options, which is probably why CME Group is taking that road.