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June 17, 2007


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Zachary Scheidt

Yes i saw that comment from CBOT. I think he's exaggerating the scenario a bit. Thanks for your comment on my blog - i'll check back often here to see your work!

Victor Cook, Jr., New Orleans, Louisiana


The Chief Executive of CBOT claims a takeover by ICE would cost the exchange its liquidity:

"We're not talking just about a dip in sales here, but the potential permanent loss of our liquidity pools," Chief Executive Bernard Dan and Chairman Charles Carey said in a letter being distributed on the CBOT's trading floors.

In this Yahoo! news report he also claims their volume in a day is as great as Mr. Sprecher's NYBOT in a month. Even if that's true, given the current state of platform technology, isn't it possible to scale up that much without any disruption in traffic?

Zachary Scheidt

I think the CBOT would do well to look at ICE but it appears they are dead set against such a merger. I don't know if it is because the CBOT has a longer track record and a more prestigious name or if they truly think ICE will not be able to recognize synergies. ICE seems to have a very advanced clearing process and an increasingly diverse set of trading clients. They will likely do very well even if they are not able to win this courting battle.

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