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Global Trading Domination


Exchanges are locked in a battle for global trading domination this year. The New York Stock Exchange bought EuroNext, establishing the first transatlantic exchange.

Meanwhile, NASDAQ paired up with Borse Dubai to buy Nordic exchange OMX. And the Chicago Merc took over the Chicago Board of Trade to become the world's largest futures exchange.

Sector Trade

What's driving it? The developing financial world, a surge in computer driven trading and the boom in derivatives which is currently expanding at a 20% every year.

CME Chief Executive Craig Donohue is one of the men leading this charge and he joins the panel for this conversation. Following are excerpts from what was said.

Do you feel comfortable with your assets?

“We absolutely do. We’re very proud of what we’ve accomplished,” says Donohue. “We’ve been the fastest growing exchange in the marketplace for several years now. And we’ve just completed a very historic and important transaction, to acquire the Board of Trade. Now we’re the largest and most diverse exchange in the world in terms of the breadth of products that we offer.”

Does the merger bring scale?

“We’ve become a global electronic marketplace and have tremendously scalable platforms,” replies Donohue. “And we’ve done a really good job of expanding our customer base and expanding our products. We provide technology for own business as well as transaction processing services to other exchanges. We’ve been very fortunate.”

What’s next?

“We’re focused on completing our integration with the Board of Trade although we’re doing that in a very expedited fashion,” says Donohue. “And we’re going to have all of our products on the CBE / Globex platform by January. In addition, we’ll complete the consolidation of our trading floor facilities by June of next year.”

He adds, “We’re very dynamically looking at a wide range of growth opportunities which include global expansion. (Also we’re) enhancing our technology on a global basis and we’re looking at partnerships and joint ventures. And we wouldn’t rule out further consolidation.”

How about buying the NYMEX?

“I would never comment on something like that, but we enjoy a really good partnership with NYMEX… and we respect them very much and like their business very much.”

Is that how you felt about the Board Of Trade?

“The partnership with The Board of Trade really was a facilitator… we established a relationship between the two companies and it certainly did play a role in helping effect the merger,” says Donohue.

Dylan asks the traders which exchange they like most?

Guy Adami likes NYSE (NYX) which he feels is still the cheapest.

Karen Finerman reveals she sold NYX Thursday because it had run up “so far so fast.”

Global Trading Domination

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Trader disclosure: On Oct 11, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Macke Owns (EMC), (HAS), (INTC), (JWN), (ATVI): Najarian Owns (GOOG); Najarian Owns (EMC) Call Options: Finerman's Firm And Finerman Own (ASD): Finerman's Firm Owns (DAI), (LTD), (MSFT), (NYX), (NMX), (TGT). (WMT), (GS), (COP): Finerman's Firm Owns S&P 500 Puts; Finerman's Firm Owns Russell 2000 Puts: GE Is The Parent Company Of CNBC