Currently, there are four exchanges approved to trade single stock futures in the U.S., NQLX, OneChicago, AMEX and Island Futures Exchange. Each offers its own unique benefits to traders depending on where your trading interests and preference lie. NQLX and OneChicago opened trading in a portion of their listed SSFs on November 8, 2002, with a plan to roll out other contracts on a frequent basis.

NQLX is a joint venture of the NASDAQ Stock Market, Inc. and the London Financial Futures and Options Exchange (EuronextLIFFE) and, like NASDAQ, is a wholly electronic exchange. It is independent and uses LIFFE CONNECT as its trading platform. It was the first exchange to be recognized by the CFTC as a single stock futures exchange in August 2001. As of November 25, 2002, the exchange was trading 20 single stock futures, including GM, Johnson & Johnson, and Microsoft as well as futures on exchange traded funds (ETFs).

Its parent companies offer tremendous advantages to prospective single stock futures traders. NASDAQ lists more than 4,500 companies and has the highest volume of any U.S. market. EuronextLIFFE is already experienced in trading single stock futures and its platform, LIFFE CONNECT, which will be used for NQLX, is located in 421 sites in 23 countries.

OneChicago, is a joint venture of the Chicago Board Options Exchange (CBOE), Chicago Mercantile Exchange (CME), and the Chicago Board of Trade (CbOT). The CFTC approved it for trading in June 2002. OneChicago will also operate exclusively as an electronic exchange, and orders may be entered through either CBOEdirect or through CME’s GLOBEX 2. As of November 25, 2002, OneChicago had competitively listed 44 single stock futures, including AOL Time Warner, Microsoft and futures on ETFs.

The CBOE, the world’s largest stock options exchange, began listing stock options in 1973 and index options in 1982. The CME is the largest equities futures market in the U.S.; and the CBOT is one of the busiest futures exchanges in the world.

Island Futures Exchange was approved by the CFTC to trade single stock futures February 2002. Island Futures Exchange is an affiliate of Island ECN, which has become one of the leading exchanges for NASDAQ securities executing approximately one out of every six trades in NASDAQ securities. As of this writing, they have not set up a market maker program to ensure liquidity, like OneChicago or NQLX. Instead Island intends to succeed by offering the lowest possible price to traders. Island has yet to list stocks for futures trading, but they have developed contract specifications.

AMEX, in contrast to all other single stock futures exchanges, will offer single stock futures in an open-outcry pit, placing the new product alongside their options. Amex is the second largest options exchange in the U.S. and is relying on its success in open outcry options to translate into single stock futures open outcry success. As of November, 2002, Amex has not yet listed its single stock futures or contract specifications. However, exchange spokespersons have said that though Amex single stock futures have been perceived as strictly pit bound, that’s somewhat of a misconception. Virtually all of the smaller order types – retail-type options orders – are now handled electronically via automatic execution on the exchange’s Auto-Ex system. Amex hasn’t yet decided at what size they will allow automatic execution for single stock futures, but if it doesn’t Auto-Ex, it will route to the electronic book. More complicated or large orders would electronically route directly to the specialist.