Increases in trading, dues drive 9% profit rise for CBOT

The Chicago Board of Trade, the second-biggest U.S. futuresmarket, said first-quarter profit rose 9 percent, fueled by anincrease in trading and member dues.

Net income rose to $16.2 million from $14.8 million a yearearlier, President Bernard Dan wrote in a letter sent to members andfiled with the Securities and Exchange Commission. Revenue rose 24percent to $100.9 million.

Transactions rose after the exchange cut some fees in an effort toprevent traders from switching to Frankfurt, Germany-based Eurex,which opened an electronic U.S. unit in February offering futures onTreasury debt. The Board of Trade also collected $9.3 million inextra dues to fight Eurex.

"In spite of the fact that we lowered fees we still made money --that's a great sign," independent trader Harold Lavender said duringa break from buying and selling 10-year note futures at the CBOT.

Transactions at the Board of Trade rose 44 percent to 136.6million contracts in the first quarter. Trading in futures tied tograins, for which fees stayed at last year's levels, rose 63 percentto 14.3 million.

The exchange in January began clearing transactions through itsneighbor, the Chicago Mercantile Exchange -- a move it says has savedtraders $1.8 billion in the amount they must put up to back bets atthe two markets. The CBOT also started using a new electronic systemthat it says has boosted computer-based trading.

"The exchange and its customers have reaped tremendous benefitsfrom the successful implementation of the CME/CBOT Common ClearingLink and the migration to a premier electronic trading platform," Danand Chairman Charles Carey wrote in the letter. The new systems have"fostered significant growth."

The CBOT collected clearing fees for the first time, earning a net$4.4 million after paying the Mercantile Exchange.

Bloomberg News