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32-622: Founded by the Chicago Board of Trade in 1973 and member-owned for several decades, the Chicago Board Options Exchange was the first exchange to list standardized, exchange-traded stock options, and began its first day of trading on April 26, 1973, in celebration of the 125th birthday of the Chicago Board of Trade. In 1969, the vice chairman of the Chicago Board of Trade, Edmund “Eddie” O’Connor, developed

64-658: A "rule of reason." On October 19, 2005, the initial public offering (IPO) of 3,191,489 CBOT shares was priced at $ 54.00 (USD) per share. On its first day of trading the stock closed up +49% at $ 80.50 (USD) on the NYSE . In 2007, the CBOT and the Chicago Mercantile Exchange merged to form the CME Group. Since 1930, the Chicago Board of Trade has been operating out of 141 West Jackson Boulevard, Chicago, in

96-537: A Constitution. A committee then developed bylaws that were adopted on the first Monday of April by 82 charter members of the Board of Trade. In 1864, the CBOT listed the first ever standardized "exchange traded" forward contracts, which were called futures contracts . In 1919, the Chicago Butter and Egg Board , a spin-off of the CBOT, was reorganized to enable member traders to allow future trading, and its name

128-614: A building designed by architects Holabird & Root that is 605 feet (184 m) tall, the tallest in Chicago until the Richard J. Daley Center superseded it in 1965. This Art Deco building incorporates sculptural work by Alvin Meyer and is capped by a 31-foot (9.5 m) tall statue of the Roman goddess Ceres in reference to the exchange's heritage as a commodity market . Ceres

160-495: A controversial move that angered some long-time traders. Notes Bibliography Further reading Alternative trading system Alternative trading system ( ATS ) is a US and Canadian regulatory term for a non-exchange trading venue that matches buyers and sellers to find counterparties for transactions. Alternative trading systems are typically regulated as broker-dealers rather than as exchanges (although an alternative trading system can apply to be regulated as

192-515: A securities exchange). In general, for regulatory purposes, an alternative trading system is an organization or system that provides or maintains a market place or facilities for bringing together purchasers and sellers of securities, but does not set rules for subscribers (other than rules for the conduct of subscribers trading on the system). An ATS must be approved by the United States Securities and Exchange Commission (SEC) and

224-690: A security's market capitalization and trading volume . ATSs are generally electronic but don't have to be. ATSs can be distinguished from electronic communication networks (ECNs), which are a "fully electronic subset of ATSs that automatically and anonymously match orders". In recent years, the SEC and other regulators have ramped up their enforcement activities with respect to alternative trading systems, initiating broad investigations and bringing actions for various violations, such as trading against customer order flow or permitting external vendors to retain and make use of confidential customer trading information in

256-464: A serious problem. The CBOT took shape to provide a centralized location, where buyers and sellers can meet to negotiate and formalize forward contracts. An early 1848 discussion between Thomas Richmond and W. L. Whiting regarding the propriety of creating a board of trade led to the March 13 meeting merchants and businessmen in favor of establishing it and a resulting resolution for such an establishment and

288-638: Is also the title and subject of a classic novel (1903) by Frank Norris . Trades are made in the pits by bidding or offering a price and quantity of contracts, depending on the intention to buy (bid) or sell (offer). This is generally done by using a physical representation of a trader's intentions with his hands. If a trader wants to buy ten contracts at a price of eight, for example, in the pit he would yell "8 for 10", stating price before quantity, and turn his palm inward toward his face, putting his index finger to his forehead denoting ten; if he were to be buying one, he would place his index finger on his chin. If

320-434: Is an alternative to a traditional stock exchange . The equivalent term under European legislation is a multilateral trading facility (MTF). These venues play an important role in public markets for allowing alternative means of accessing liquidity . They can be used for trading large blocks of shares away from the normal exchange, a practice that could otherwise skew the market price in a particular direction, depending on

352-494: Is looking to extend its geographical reach and products while cutting costs." The deal was completed in March 2017. Over the next few years CBOE migrated its exchanges onto the BATS technology platform. In February 2020, Cboe completed its acquisition of two data analytics firms, Hanweck and FT Options. That same year, CBOE acquired Trade Alert, a New York-based order flow analysis service provider. Also in 2020, Cboe acquired EuroCCP,

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384-409: Is often claimed to be faceless because its sculptor, John Storrs , believed that the forty-five story building would be sufficiently taller than any other nearby structure and as a result that no one would be able to see the sculpture's face anyway. However, this popular rumor was disproved, with the sculptor intending to give the statue an ethereal and god-like look by being faceless. On May 4, 1977,

416-561: Is one of the world's oldest futures and options exchanges . On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form CME Group . CBOT and three other exchanges (CME, NYMEX, and COMEX) now operate as designated contract markets (DCM) of the CME Group. The concerns of U.S. merchants to ensure that there were buyers and sellers for commodities have resulted in forward contracts to sell and buy commodities. Still, credit risk remained

448-401: The Chicago Board of Trade Building was designated a Chicago Landmark . The building is now a National Historic Landmark . Today the Board of Trade Building is closely joined by numerous skyscrapers in the heart of Chicago's busy Loop commercial neighborhood. The pit is a raised octagonal structure where open-outcry trading takes place. Operating during regular trading hours (RTH),

480-408: The CBOT trading floor contains many such pits. The steps up on the outside of the octagon and the steps down on the inside give the pit something of the appearance of an amphitheater, and allow hundreds of traders to see and hear each other during trading hours. The importance of the pit and pit trading is emphasized by the use of a stylized pit as the logo of the CBOT. The Pit: a story of Chicago

512-647: The Chicago Board Options Exchange introduced the CBOE Volatility Index, commonly known as the VIX Index. The index was developed by Robert E. Whaley , a Vanderbilt University finance professor, and was intended to measure the 30-day implied volatility of S&P 100 option prices. In 2003, the underlying benchmark for the VIX was changed to the S&;P 500. The company launched tradeable products using VIX as

544-625: The Dutch clearing house. The company already owned 20% of the clearing house and purchased the remaining 80%. In May 2020, the company announced it was expanding into Canada, via acquisition of the Canadian stock trading platform, MATCHNow, which operated an alternative trading system (ATS). Cboe acquired another ATS operator, BIDS Trading, in October 2020. In June 2021, Cboe announced that it had completed its acquisition of Chi-X Asia Pacific. Through

576-603: The LiveVol platform, a market data services provider. In January 2016, CBOE announced it had purchased a majority stake in Vest Financial, an investment adviser specializing in options-centric products. In September 2016, CBOE announced that it was purchasing BATS Global Markets for approximately US$ 3.2 billion. BATS was then the second-largest U.S. stock exchange by shares traded and was known for being technology focused. Business Insider noted that by buying BATS, "CBOE

608-550: The Securities and Exchange Commission. The CBOT hired Joseph Sullivan to address regulator concerns and present the concept to the New York brokerage community. In October 1971, the SEC relented and approved the effort. In February 1972, the Chicago Board Options Exchange was incorporated as an independent body with its own bylaws and governing board. Joseph Sullivan became the president of the organization. Trading commenced on

640-782: The US, Canada, the Netherlands and Australia. Its Canadian operations, Cboe Canada, accounts for 15% of the trading in securities listed in Canada by volume. In Australia, the company operates Cboe Australia, following Cboe's acquisition of Chi-X in Australia and Japan. Its European operations, Cboe Europe, is based in London and Amsterdam. By trading volume, Cboe's stock exchanges are the largest in Europe, second-largest in Canada and third largest in

672-481: The US. In addition to its exchanges, Cboe operates clearing houses . These include its European clearing house, Cboe Clear Europe. The company also has a cryptocurrency exchange , Cboe Digital, for exchanging crypto currencies and derivatives. The platform, originally ErisX, was acquired by Cboe in 2021. The company is headquartered in Chicago, where it operates a trading floor for open outcry trading. Cboe has two main proprietary index options products, options on

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704-712: The VIX Index, an index that measures expectations for stock market volatility and options on SPX, the Standard & Poor's 500 index. The company also provides platforms for trading options on other indices, including the Russell 2000 Index. As of 2023, Fredric Tomczyk, a board member since 2019, is the company's CEO. Chicago Board of Trade 41°52′40″N 87°37′56″W  /  41.877821°N 87.632285°W  / 41.877821; -87.632285 The Chicago Board of Trade ( CBOT ), established on April 3, 1848,

736-829: The acquisition, Cboe established a significant presence in the Asia Pacific region for the first time by gaining access to two of the world's largest securities markets in Japan and Australia. In November 2021, Cboe announced it had agreed to acquire NEO , the Canadian stock exchange operator. In May 2022, Cboe completed its acquisition of Eris Digital Holdings (ErisX), a US-based digital asset spot market , regulated futures exchange, and regulated clearinghouse . The company operates in North America, Europe and Asia-Pacific, providing platforms for trading options, futures, equities, and foreign exchange. It has stock exchanges in

768-579: The company rebranded from CBOE Holdings to Cboe Global Markets. In September 2019, Cboe Global Markets announced it was relocating its headquarters to the Old Chicago Main Post Office and that a new trading floor would be constructed in the Chicago Board of Trade building, which was the space the exchange originally occupied in the 1970s and 1980s. The new trading floor opened in June 2022. In September 2011, CBOE Stock Exchange, which

800-429: The exchange on April 26, 1973, and was conducted in the former CBOT smoking lounge. During its first full month of operation, 34,599 contracts were traded. By 1976, the monthly volume of trades had increased to 1.5 million. Over the next decade CBOE continued to operate from its location within the CBOT building. In 1984, CBOE moved to its next headquarters across the street at 400 S. LaSalle Street. On January 19, 1993,

832-417: The hand signal language used in CBOT's trading pits has been compiled and published. With the rise of electronic trading, the importance of the pit has decreased substantially for many contracts, though the pit remains the best place to get complex option spreads filled. In 2015, The Chicago Board of Trade officially eliminated the use of open outcry in all agricultural products in favor of electronic trading,

864-471: The idea for an options exchange. At that time, options on stocks were traded in a New York-based, over-the-counter market which required a direct link between the buyer and seller and complex terms of sale. The options exchange that O'Connor imagined would use a central clearinghouse to facilitate trades and stand behind contracts. The Chicago Board of Trade established a committee to evaluate the concept. The options market idea faced resistance from officials at

896-419: The trader wants to sell five contracts at a price of eight, they would yell "5 at 8", stating quantity before price, and show one hand with palm facing outward, showing 5 fingers. The combination of hand-signals and vocal representation between the way a trader expresses bids and offers is a protection against misinterpretation by other market participants. For historical purposes, an illustrated project to record

928-572: The underlying index. Cboe developed and launched a futures exchange, and in early 2004 the company began trading VIX futures, after a survey of Goldman Sachs salespeople showed interest in trading VIX futures. On March 11, 2010, CBOE filed paperwork to launch an initial public offering and began trading on the NASDAQ stock exchange on June 15, 2010. The company delisted from the NASDAQ and listed its shares on its own exchange in 2018. In October 2017,

960-498: The vendor’s trading activities. Rule 300(a) of the SEC's Regulation ATS provides the following legal definition of an "alternative trading system": Any organization, association, person, group of persons, or system: Regulation ATS was introduced by the SEC in 1998 and is designed to protect investors and resolve any concerns arising from this type of trading system. Regulation ATS requires stricter record keeping and demands more intensive reporting on issues such as transparency once

992-507: Was changed to Chicago Mercantile Exchange (CME). The Board's restrictions on trading after hours on any prices other than those at the Board's close gave rise to the 1917 case Chicago Board of Trade v. United States , in which the U.S. Supreme Court held that the Sherman Antitrust Act of 1890 's language outlawing "every contract ... in restraint of trade" was not to be taken literally, but rather should be interpreted under

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1024-540: Was owned by CBOE Holdings, entered into an agreement to acquire the National Stock Exchange . The acquisition was completed on December 30, 2011, with both exchanges continuing to operate under separate names. The National Stock Exchange continued to be based in Jersey City . The National Stock Exchange ceased trading operations on May 30, 2014. In August 2015, CBOE finalized its acquisition of

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