Average daily volume in the bond pit during the 1980s ?

C

CALLumbus

Hi all,

do you know how many contracts have been traded on average per day in the CBOT bond pit during the high inflation years of the 80s ? It was the time of trading legends like Tom Baldwin and Charlie D. ...

How do those days compare to our modern electronic trading with average daily volumes of >1 million in the ES and ZN... was there even more volume traded during that time in the 80s ?

Thank you :)
 
Hi Speculate and bone, thanks for your input.

I have found some data and would like to share it with you :)

In 1978, the (bond futures market) traded 555,350 contracts, ranking it the 22nd largest futures contract in the United States with less than a 1 percent market share. At the time, the Chicago Board of Trade alone had six other futures contracts trading larger volumes, including soybean futures, the number one ranking contract in 1978.

In 1980, the year Charlie D started trading, the bond contract was the fourth largest contract with a volume of almost 6 million contracts, still behind corn and soybean futures contracts at the Chicago Board of Trade, which both traded over 11.7 million contracts each.

But in 1981, the bond futures contract became the world's largest, trading 13.9 million contracts. It retained the number one ranking in 1990, the last full year that Charlie traded, trading 75.5 million contracts, or 27.3 percent of the total volume of 51 futures contracts with volume over 100,000 contracts. In addition, it held the position as the number one futures contract for the entire decade through 1990.

In 1995, the Board of Trade's interest rate complex became the exchange's economic engine, accounting for 160 million of 210 million total futures and option contracts traded at the world's largest futures and option exchange.
 
Indeed, Charlie D was and still is a true legend. And an excellent correlations trader.

Your post might deserve a postscript in terms of CBOT continued history into the later 1990's and early 2000's. The CBOT membership and the board ( composed of Full Seat Holders ) stifled electronic trading during day hours as a matter of policy. CME Globex and ICE embraced it. Furthermore, in Europe, by the late 1990's the LIFFE interest rate pits went electronic, and you had the emergence of Eurex as totally electronic trading exchange with no membership fees or seats required. Very smart.

While the CME and ICE were building up their ECN infrastructure and electronic trading platforms in the 1990's, the CBOT voted to build a hugely expensive and shortly thereafter doomed financial products trading building. Volume at the CBOT fell off rather sharply as Globex, LIFFE, and Eurex electronic markets built rapidly expanding participation and volume. Belatedly, the CBOT eventually voted to allow "side-by-side" trading, but it was hamstrung from the start with technology and fee limitations. Much too little and far, far too late. Trading volume revenue steadily dried up at the CBOT and the debt incurred by building a very expensive shrine to the already outdated model of pit trading started to really eat into the CBOT's balance sheet. As a result, Membership Seat Prices plummeted severely.

As a result, by the early 2000's both CME and ICE were in a superior financial position to start a bidding war to buy the CBOT. While ICE was eventually rebuffed in their CBOT bid (which many contend was superior to the CME bid), ICE gobbled up LIFFE and NYFE and consolidated the electronic swaps market through their own products and some key acquisitions. And of course, ICE also ended up buying the NYSE.

While the CBOT Board and Membership made decisions which were always in each individual's personal best financial interests, it doomed the future of the exchange.
 
You must log in or register to reply here.
Back
Top