UPDATE 1-Upstart ELX latest to take on CME's dominance

Fri Jul 10, 2009 9:40pm BST

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* First day turnover close to 20,000 contracts

* Latest in long string of challenges to Chicago dominance

* Lack of fungibility an advantage for market leader (Adds details, background, analyst comment, byline)

CHICAGO, July 10 (Reuters) - ELX Futures LP, the upstart futures exchange that hopes to to challenge the dominance of CME Group (CME.O: Quote, Profile, Research) opened for business on Friday with modest volume.

Turnover in ELX's U.S. Treasury debt futures through mid-afternoon was 19,478 contracts, the exchange said on its website.

ELX thus grabbed a 1.5 percent market share for those contracts, below the 6 percent share that Eurex US gained when it took on the Chicago Board of Trade in 2004. The CBOT is now part of CME Group.

New York-based ELX has the backing of 13 major banks and brokerage firms, which together represent a sizable share of total U.S. futures activity.

Diego Perfumo, analyst at Equity Research Desk, a Connecticut-based advisory firm, said volume from liquidity providers should create a niche for ELX. Continued...