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Jul 6, 2007 - AB / ER2 Russell2000 will be moving to a new exchange in September. This will cause a shift in volume as traders make the move and will require traders to subscribe to the new exchange in order to get the data.

AB / ER2 Russell2000 will be moving to a new exchange in September. This will cause a shift in volume as traders make the move and will require traders to subscribe to the new exchange in order to get the data.

ICE already has several futures and futures on options contracts based on the Russell indexes trading on its New York Board of Trade [NYBOT] subsidiary, but the exclusivity agreement means that the Chicago Mercantile Exchange (CME) will not be able to renew its license to list Russell-based futures contracts. Currently, futures contracts based on the Russell indexes represent roughly 3% of the CME’s total trading volume, and 10% of its equity index trading volume. Those are small percentages, but rather big numbers: As of the end of May, the exchange’s total volume for Russell-linked products year to date was more than 14.5 million contracts—most of that attributable to the E-mini Russell 2000 contract. The ICE, by contrast, had a total year-to-date volume of less than 250,000 Russell-linked contracts.

The ICE currently lists contracts on the Russell 1000, 2000 and 3000 indexes in addition to the growth and value sub indexes of the Russell 1000 and 2000 indexes. However, it only began trading futures and mini futures contracts on the Russell 1000 on June 15. It expects to begin trading in mini Russell 2000 futures contracts by August 29.

“Russell has really wanted to grow its franchise and felt like we could give it the attention and advocacy the (Russell 2000) contract deserves because of its leading status as a benchmark for mutual fund managers,� says Kelly Loeffler, vice president of investor relations and corporate communications at ICE.

Although the ICE is primarily known for its energy and soft commodities contracts, Loeffler says that when it acquired NYBOT it also acquired the world’s leading marketplace for Russell 1000 contracts.

Russell has been pleased with its relationship with the CME and, in particular, with the growth of the E-mini Russell 2000 contract, says Russell spokesperson Jennifer Tice.

“However, we have decided to move our contract exclusively to Intercontinental Exchange in order to grow investable products on the entire family of Russell Indexes, including the Russell 1000,� said Tice. “Russell chose ICE because we believe they offer the best advocacy potential for our entire family of Russell Indexes, especially in our quest to increase the number of products based on Russell 1000 and our other U.S. equity indexes.�

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