What is the London International Financial Futures and Options Exchange (LIFFE)?

by Investing School on January 24, 2011

The term “London International Financial Futures and Options Exchange”, which is also known by the acronym “LIFFE”, is an exchange dealing in futures and options based in London, England. Initially known as the “London International Financial Futures Exchange,” LIFFE opened on September 30, 1982, using a model like the Chicago Board of Trade and the Chicago Mercantile Exchange.

The words “And Options” were added to the title in 1993, as a result of a merger with the London Traded Options Market, which added equity options to its range of products. A further merger took place in 1996, with the London Commodity Exchange, adding commodities to the market. Because of these patterns of growth, the LIFFE exchange has been largely used to manage business relating to futures, options and commodities contracts.

In 2002 LIFFE was acquired by Euronext. This acquisition was viewed as part of an effort to boost Euronext’s presence as a derivatives market. As a result, LIFFE has been dubbed Euronext.liffe.

LIFFE was known for long using the open outcry system to manage trades on its market, meaning that there was an actual open area where all of the market action took place. LIFFE demonstrated a strong reluctance to switch over to an electronic trading system, which was part of the reason that it suffered during those times compared to other European markets. LIFFE finally switched to LIFE CONNECT, which is a broad-based electronic trading platform.

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