262 Implications of the Four Basic Transformations the trading community use the flood of data to develop new strategies and new order types. Automated trading applications are helping traders trade a larger suite of products and manage greater volume. Transparency in the marketplace has also helped regulators and risk managers track markets and trading activity more efficiently and accurately. The benefits of the new model have been sig- nificant and, as exchanges continue to grow, the financial markets will continue to find creative ways to reap the rewards. Globalization:BringingtheWorldCloserTogether The physical boundaries of exchanges limited their growth and market share. Although traders could trade by telephone, customers off the floor were at a disadvantage to the traders on the floor. Any significant growth for an exchange would require a bigger physical floor, which is costly to build and maintain. The only way to significantly increase market share would be to eliminate the physical boundaries of the exchanges. And the new model provided exchanges just that. The computers and networks allowed exchanges to connect to the trading community virtually. The globalization of exchanges through the use of technology has allowed them to expand by connecting with exchanges around the world. They are now able to list new products (created or acquired) quickly and with very little up-front cost. This global expansion has led to a significant surge in the volume across exchanges and across asset classes. Pioneers chose cyberspace instead of a physical floor to build their exchanges. Some of the early followers took the risk of migrating their products off the physical floor and onto the electronic platform. These exchanges began seeing the benefits of the electronic trading model as they moved their operations off the floor. They saw their market share increase and exchange volume surge. We saw CME establish Globex to capture market share in Asia, and we saw Eurex build remote connections to reach traders in continental Europe and the United States. With the help of this expanded market, Eurex was able to capture LIFFE's flagship product. This infamous steal was a wakeup call for other derivatives exchanges. As these upstarts grew, the financial markets saw the power of the electronic trading model. As more exchanges began adopting electronic trading, the market share and trading volume at those exchanges increased. Whether it was the battle between the ICE (electronic energy market) and NYMEX (floor based) in the futures world or ISE (electronic options market) and CBOE (floor based), the story was the same: Electronic trading won. As the exchanges converted from the floor-trading model to the electronic trading model, they began their journey toward globalization. They established their global footprint by transforming their business model through partner- ships, mergers, and acquisitions. The open exchange API served as a bridge between the exchanges and the trading community. The new players in the