OneChicago
| Company type | Private |
|---|---|
| Industry | Financial services, Futures exchange |
| Founded | 2001 |
| Founder | Chicago Board Options Exchange, Chicago Mercantile Exchange, Chicago Board of Trade (collaborative venture) |
| Defunct | September 2020 |
| Fate | Ceased operations |
| Headquarters | Chicago , United States |
Area served | United States |
| Products | Single-stock futures, Securities futures contracts, Weekly spreads, Synthetic bonds, Exchange Futures for Physical (EFP) |
| Owner | IB Exchange Group, CBOE Holdings, CME Group |
| Website | onechicago |
OneChicago was a fully electronic futures exchange based in Chicago, Illinois, within the United States. The platform featured roughly 12,509 single-stock futures (SSF) offerings, covering prominent corporations such as IBM, Apple, and Google. All transactions were cleared via the Options Clearing Corporation (OCC). Operations at OneChicago concluded in September 2020.
The exchange's ownership was divided among IB Exchange Group, CBOE Holdings, and CME Group. As a privately owned entity, it fell under the regulatory oversight of both the Securities and Exchange Commission and the Commodity Futures Trading Commission.
History
The passage of the Commodity Futures Modernization Act of 2000 authorized the trading of single-stock futures within the U.S., prompting the launch of two exchanges on November 8, 2002. OneChicago emerged as a collaborative venture involving the Chicago Board Options Exchange, Chicago Mercantile Exchange, and Chicago Board of Trade. The competing exchange, NQLX (operated by Euronext.liffe), ceased operations in December 2004, transferring its outstanding contracts to OneChicago. In 2006, Interactive Brokers purchased a 40% ownership share in OneChicago, while Chicago Mercantile Exchange and CBOE each retained 24%; the remaining shares were held by the Chicago Board of Trade and OneChicago’s management team. Following the merger of the Chicago Mercantile Exchange and Chicago Board of Trade in 2007, CME Group was formed. OneChicago ultimately terminated its services in September 2020.
Trading Volume
On January 4, 2016, OneChicago announced that December 2015 trading volumes reached 1,476,641 contracts, contributing to an annual total of 11,714,015 contracts. This represented a 7% rise compared to the previous year and established a third consecutive record for yearly volume.
Electronic platforms and clearing
The proprietary order matching and trade reporting system called Delta1 replaced the OCX.BETS platform for block trades and Exchange for Physicals (EFP) orders starting October 20, 2014. In January 2015, Delta1 expanded functionality by incorporating Central Limit Order Book (CLOB) capabilities.
Membership in OneChicago was automatically extended to participants of CME Group and CBOE. Furthermore, any Options Clearing Corporation clearing member authorized for Security Futures could submit orders for execution. Trades on OneChicago involving securities futures were conducted through either securities or futures accounts.
Securities Futures Contracts
As of January 20, 2016, OneChicago listed 13,380 security futures products. This included 2,662 futures linked to exchange-traded funds and 1,846 No Dividend Risk contracts. Each single stock futures contract on OneChicago represented a commitment to deliver 100 shares of a specified stock at a predetermined expiration date. The exchange supported both standard monthly (SSQQ) expirations and weekly expiration cycles.
No Dividend Risk contracts addressed ordinary dividends as corporate actions by adjusting the prior trading day's settlement price downward by the dividend amount on the morning of the Ex-dividend Date.
Weekly Spreads and Synthetic Bonds
Weekly expiring spreads functioned as centrally cleared, exchange-traded substitutes for conventional over-the-counter stock loans and dealer equity repurchase agreements. Investors could close stock positions while establishing long futures positions by selling the expiring future (the first leg) and purchasing a deferred expiration contract (the second leg), effectively shifting delta exposure from shares to futures.
For stocks that are difficult to borrow, the purchase price of the deferred futures was lower than the sale price of the stock (a backwardation scenario), enabling investors to synthetically lend shares and capture a hard-to-borrow premium. Conversely, for general collateral stocks, futures prices exceeded stock sale prices (contango), allowing investors to monetize their holdings while incurring interest costs on sale proceeds. This approach is commonly referred to as selling single stock futures against underlying shares or creating synthetic bond positions.
Exchange Futures for Physical (EFP)
An Exchange Futures for Physical (EFP) transaction involves simultaneously purchasing or selling the underlying stock while executing an opposite trade in the same quantity of Single Stock Futures (SSFs) with a counterparty holding the reverse position. This mechanism allows participants to transition between long or short positions in the underlying asset and SSFs without incurring market risk, as both positions share identical delta values. Consequently, this strategy can be used to secure more advantageous financing arrangements.
On May 14, 2014, OneChicago discontinued its competitive EFP trading platform. Nonetheless, market participants may still carry out privately negotiated off-exchange EFP transactions, which can be reported via OneChicago's Delta1 system.