The Cantor Exchange (CX)an all-electronic derivatives market that has, to date, exclusively traded U.S. Treasurieshas filed an application with the Commodity Futures Trading Commission to trade U.S. agency contracts. Currently, the CX competes directly with the Chicago Board of Trade for U.S. Treasury market share. But the exchange expects its agencies filing to vault it into competition with both the CBOT and the Chicago Mercantile Exchange.
A CX official says that the CBOT and CME have already filed with the CFTC to trade agencies. While asserting that the CX, CBOT and CME will all begin trading agencies around the same time, the official declines to specify the date that trading will commence.
News of the CXs agencies filing comes on the heels of the CFTCs approval of the exchanges block trading application. Less than two weeks ago, the CX received permission to perform block trades of its long-bond and 10-year-note Treasury contracts.
The official cites block trading, cross-margining of cash and futures and real-time pricing as features that separate the CX from the CBOT. With electronics, were giving people real-time price dissemination. If Im a customer and I go into the Cantor Exchange, I know the price Im acting upon because I see it in real time on a screen, he says.
Clients of CX also benefit, says the official, from instantaneous fills of orders. It doesnt take two or three minutes to get an order filled. In our world, it takes about 300 milliseconds, he claims.
Down the road, in addition to battling for U.S. derivatives market share, the CX wants to make its mark in Europe. We have regulatory approval to launch in Germany, England and France. And preliminary approval in Italy, says the official. However, he declines to specify when the CX expects to launch in each of those countries.