January 22, 2009 (CHICAGO) (WLS) -- In this economic downturn even the Chicago Stock Exchange is fighting for profits in the view of many analysts. Technological change and intense competition have eroded the exchange's position in the market. Now, published reports claim the exchange has been warned to cut costs drastically or face going out of business.
Many of the most profitable stock exchanges -- the NYSE, the NASDAQ, for example -- are owned by some of the biggest players in the market. That makes those "customers" placing trades with "their" exchanges a logical thing to do -- after all, those fees and commissions end up helping people "in house." But the Chicago Stock Exchange relies more on executing trades for customers who don't own a piece of it. And that, combined with a host of other factors, has at least one shareholder group pressuring the CHX to run its business better -- or start firing some people.
The galloping steed outside the Chicago Stock Exchange on South LaSalle gives the impression of movement, but like the virtually frozen credit markets, the volume of trading action here appears to just not be bringing in the money like it used to flow.
"We really are a microcosm of larger markets. Our challenges are those of others," said Dave Herron, CHX CEO.
