8. A New Wave of Product Innovation
Product innovation is crucial to the growth of exchanges. Stock exchanges continually list new stocks, but it has been their venture into other equity-related products such as exchange-traded funds that has created growth. Equity options exchanges have expanded via a number of new equity indexes. The shift to electronic trading has significantly reduced the cost of starting a new product. It used to be that new products required floor space and traders. Today electronic exchanges require just a little more server space. And the pace of product innovation has increased significantly.
In this and the next four chapters, we discuss the implications of the four basic transformations we explored in ...