ELX Futures traded nearly 20,000 Treasury futures contracts on its first day of business, a would-be opening shot against Chicago-based derivatives giant CME Group Inc. (CME).

The figure addressed lingering doubts as to whether the new electronic platform would draw any activity upon launch, with ELX's total volume representing 1.6% of CME's Treasury derivatives business, where about 1.23 million contracts traded electronically over Friday's session.

In an interview, ELX Futures Chief Executive Neal Wolkoff said first-day trading activity exceeded his expectations, with the number of users "outstanding."

The upstart exchange, in development for a year and a half, is backed by a consortium of banks, trading firms and technology companies pushing a lower-cost alternative to CME, which maintains an effective monopoly on Treasury futures.

CME executives have been dismissive of ELX, the latest in a series of ventures aimed at loosening its hold on the market. "We provide the most efficient markets for our global customers who rely on our ability to provide liquidity backed by our proven central counterparty clearing model," said Michael Shore, a CME spokesman, on Friday.

Wolkoff said that much of ELX's opening-day business came from its backers, which include Goldman Sachs (GS), Citigroup Inc. (C), Deutsche Bank (DB), Merrill Lynch & Co. and its acquirer Bank of America Corp. (BAC), Barclays PLC (BCS) unit Barclays Capital, Credit Suisse Group (CS), BGC Partners Inc. (BGCP), Getco, JPMorgan Chase & Co. (JPM), Peak6 and Royal Bank of Scotland PLC (RBS). ELX also saw some business from outside customers, Wolkoff said; in recent weeks he has signed up futures commissions merchants Newedge and MF Global (MF).

At the close of trading Friday, ELX saw about 9,900 September-dated 10-year Treasury futures, its most actively traded product, change hands.

Trading volume in September five-year Treasury futures was about 5,000 contracts, 2,900 in 30-year bond futures, and 1,850 in two-year notes.

More impressive than the volume, Wolkoff said, was the fact that prices on ELX's Treasury futures generally marched in lockstep with their counterparts on CME. That shows market participants that ELX can provide the same quality of trade execution as its much-larger competitor, according to Wolkoff.

"Nobody would execute on an upstart market if they could get a better price on an established market," he said. ELX Futures' opening-day total tops previous CME challenger BrokerTec, which reported about 9,600 contracts traded in its inaugural session in December 2001; that was about 2.4% of total Treasury futures volume on the Chicago Board of Trade for the same session.

The Chicago Board of Trade merged with the Chicago Mercantile Exchange to form CME Group in 2007. But ELX's day-one business was less than that of Eurex US, a Treasurys-focused exchange launched by Frankfurt-based Deutsche Boerse AG (DB1.XE) in February 2004.

Eurex US handled about 39,400 contracts in its debut session, about 6% of corresponding Treasury futures volume on CBOT that day. Neither of the previous CME challengers succeeded in cracking its lock on the market. The BrokerTec platform was acquired by inter-dealer broker ICAP plc in 2003.

Eurex US eventually was rebranded as the U.S. Futures Exchange before MF Global, the largest shareholder in the venture, withdrew its support in late 2008 and wound the venture down.

-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com