| Sumario: | Despite high volumes, the 2 major futures exchanges in Chicago—the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange (CME)—are troubled due to their increasing bureaucracies and escalating costs. Most futures markets are making scant profits, and Chicago's share has been dwindling for years. Since futures were developed in the 1970s, the profitability of brokering has been declining as customers became bigger than the clearing firms and were able to dictate terms. In addition, regulation has become harsher, stiffer capital requirements are driving trading overseas, and the CBOT and CME have been losing business to less regulated over-the-counter derivatives. Globex, a new electronic trading system developed by Reuters and the Chicago exchanges, was supposed to help preserve Chicago's preeminence in derivatives. The results since implementing Globex in mid 1992, however, have been so poor that Reuters may not renew the contract next April.
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