Page 1 05/16/03 4:22:56 PM
The Minneapolis Grain Exchange will fire up their new electronic trading platform, MGEXpress tomorrow. The platform will handle the MGE's new futures and options contracts for the National Corn Index and the National Soybean Index.
Electronic trading has been available on contracts at the Chicago Mercantile Exchange and the Chicago Board of Trade via the Globex system. MGEX officials tell DTN MGEXpress will allow their customers to react quickly to new market opportunities.
In layman's terms, the system works this way: a user can get software to link their computer to the MGEXpress trading system. The majority of MGEX's Futures Commissions Merchants have made commitments to connect to MGEXpress.
Electronic trading has the advantage of allowing the marketplace to be distributed across the nation, according to Kent Horsager, president and CEO of MGEX. "The trading pit can be on the trader's desk. The geographic boundaries go away."
Horsager said electronic trading creates a "fully transparent marketplace" giving participants a better feel for what is going on in the market.
Brokers contacted by DTN said they are interested in the new system.
Initially, MGEXpress will offer trade in the National Corn Index and National Soybean Index contracts. These contracts are settled against the cash, as defined by national average prices derived from daily cash bids collected by DTN. The contracts will trade daily from 8:30 a.m. to 1:45 p.m. Central time, in 5,000 bu units, for all twelve months. The last trading day will be the last business day of the settlement month, and settlement will be based on a simple average of the last three daily prices.
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