Exchange Seat Prices Show Steady Rise; Boom in Futures, Option Trading Cited
For investors seeking strong and steady returns, one commodity stands tall in terms of recent performance: exchange membership seats.</br></br>The price of doing business on most major U.S. futures exchanges has jumped this year, reflecting a 15% rise in futures trading and a 30% rise in options volume compared with the first half of 1986.</br></br>The seat-price surge continues a pattern that began nearly two years ago, when the weakening of the U.S. dollar started to cause some concern about a renewal of inflation. That concern triggered brisk activity on the commodity exchanges, and now many commodity prices, after sluggish activity stemming from a 6 1/2-year bear market, appear to have bottomed out.</br></br>Many investors "are convinced commodity prices have begun to move," John Urbanchuk, an economist for Wharton Econometrics in Bala Cynwyd, Pa., says. "People see an opportunity to make money in the markets to a much greater extent" than in recent years, he says.</br></br>Moreover, the consolidation of futures brokerages that had led to a glut of available seats in recent years has abated, industry officials and exchange executives say.