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Deutsche Terminbörse

The Deutsche Terminbörse (German Derivatives Exchange, or DTB) was the forerunner of today's Eurex.

History and People[edit]

The DTB traces its genesis to the mid-1980s, when a consortium of German banks launched what eventually became the “Finanzplatz Deutschland” initiative to both promote an equity culture in Germany and establish Frankfurt as a financial center to rival Paris and London.

Rolf Breuer had just been named head of Deutsche Bank, and it was he who recruited Berlin Stock Exchange CEO Jörg Franke to head the new “screen-based” (as opposed to “floor-based”) DTB.

The idea of launching a fully-electronic exchange was radical at the time, and had never been tried in a mature market. Switzerland's SOFFEX and Sweden's Options Market Stockholm (OM) were the only electronic exchanges operating without an open outcry trading floor, while the Chicago Mercantile Exchange’s Globex platform only operated when the trading floors were closed.

Germany was just beginning to dismantle Deutschland AG, and the market potential was staggering. The consensus among traders and exchange executives at the time, however, was that electronic platforms might serve certain low-volume niche products, but could not compete with trading floors in terms of speed or ability to handle complex orders.

Franke and Breuer, however, reasoned that only by locating DTB in cyberspace could they avoid falling victim to the rivalry among the nation’s eight regional stock exchanges, seven of which would likely boycott a trading floor located in the eighth. They quickly decided to license SOFFEX’s proprietary system, and then hired Anderson Consulting to adapt it for the German market.

Within two years of its launch in 1990, DTB became the third-largest derivatives exchange in Europe. By 1995 it had overtaken the French financial futures exchange Matif, and by the end of 1997 it had captured more than 50% of the market in the bund futures traded on Liffe.

The Battle of the Bund[edit]

In 1997, DTB became the first – and so far only – exchange to wrest volume away from an existing liquidity pool when it captured volume in Bund futures and options away from the London International Financial Futures Exchange (LIFFE).

See Eurex.