Abstract The economic theory of network externalities is used to explore the possibility of consolidation and growing market power in the exchange-traded derivatives industry. A definition of implicit mergers between exchanges is offered. It is argued that electronic exchange structure will serve as the bund from which multinational mergers between existing exchanges will emerge. Economic equilibrium should entail lower pricing of electronic exchange services initially, followed by heightened liquidity and above marginal cost pricing later. The latter will be enabled through cartelization and implicit mergers. Evidence is provided that such merger activity has begun over the past year or so, with “international linkage” as the disguise and electronic trading facilities as the vehicle.