THE SNAIL'S PROGRESS OF YANKEE ECU FUTURES
Slow growth in America's futures and options contracts on the European Currency Unit is forecast by several US banks. "We expect the contract to be a real sleeper," said one trader, "and it's likely to stay that way for quite some time."
Futures contracts that developed from well-established cash markets have often taken time to get going; Ecu futures are a new contract on a market which in Europe is only seven years old. As yet, it is not even certain that the cash Ecu market will survive.
"It's no surprise to anyone that Ecu futures are off to a slow start," said William Byers, director of futures research at Bear, Stearns and Co. of New York, which initiated the sale of Ecu-denominated bonds in the American market in November 1984 and is now the largest market-maker in Yankee Ecubonds. "Investors have a fidcuiary responsibility not to be involved in markets that are illiquid, so growth in futures will be a case of the chicken and the egg."
Activity has been divided between New York and Chicago, where rival exchanges launched similar contracts to try to capture the market.