CBOT hike fees June 1st despite record volumes

Quote from TonyYayo:

Actually in this case it's almost the opposite. When they merge, they will have a monopoly on a lot of products and so can effectively charge whatever they want because they will be a bigger force to compete with. Right now I imagine CBOT's rates are what they are bc they have to remain competitive with CME, and vice versa. ie if CME lowers the ES rate by .10, the CBOT will be prudent to do the same with their YM rate. Well after a merger there will be less competition like that. They'll have all of the US stock indices under one name, all of the fixed income under one name, their own metals products to compete with NYMEX's Globex's crude to compete with ICE's etc..
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They were able to slash rates to almost nothing to eliminate a competitor (Eurex US). Once that competitor was gone, the rates were reinstated. How that was legal is beyond me. But once CME takes over the sky will be the limit on rates.

Competition is a must among all industries (except oil :eek: )
 
Normally in assessing monopoly power any market share over 25% is considered excessive and the federal government would be down on them like a ton of bricks.

In this case it seems that 90-100% market share is seen as OK by the powers that be because in the exchange wars the americans see it as the US vs the rest of the world.

In the past the exchange members would have revolted against such blatant abuse of power but since the IPO has made them multi-millionaires their bread is now buttered firmly on the other side.

Gordon Gekko would approve. God Bless America.
 
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