London Financial Futures and Options Exchange - Explained
What is the London Financial Futures and Options Exchange?
Written by J. Mance Gordon
Updated at April 22nd, 2024
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What is the London International Financial Futures and Options Exchange?
London International Financial Futures and Options Exchange, LIFFE, is a leading market for interchange options and characteristics on Euro money market derivatives. It is a platform through which goods of variant derivatives are exchanged electronically.
How Does the London International Financial Futures and Options Exchange Work?
LIFFE was established in 1982 and 2000 it initiated operation electronically through the closure of its trading doors and later in two years it was purchased by Euronext. Series on taking overs has been witnessed in the LIFFE, after being acquired by Euronext in 2002, it was acquired by NYSE five years later, that`s, in 2007. NYSE was bought by Intercontinental Exchange Group in 2013 inevitably making LIFFE part of Intercontinental Exchange Group. LIFFE has gone through a series of expansion which was part of their huge plans one of them being the redevelopment of Spitalfields Market in the city of London which offered them a large building for their open outcry. Expansion plans for LIFFE were shelved after they lost the market for their main product. In order for LIFFE to compete effectively, LIFFE realizes that they had to develop a new version of the electronic trading platform which they called LIFFE CONNECT, which was improved and better version of its predecessor. LIFFE CONNECT was used to for all trading including the exchange range for interest rate derivatives contracts in the short-term. Traders and locals of LIFFE who own their own account and betting their own money enjoyed branding of profligate lifestyle. Pubs and wine houses along Cannon Street also recorded a massive number of LIFFE personnel all at the day and night times. Clients visiting chaotic and untidy LIFFE offices were subjected to abuse and yelling. What sustained LIFFE trading floors along with other electronic exchanges, for example, DTB was an opportunity for arbitrage. There was financial equivalence in the contracts on the German Bund traded at LIFFE and DTB which later opened arbitrage opportunities among the two marketplaces.