Chicago Mercantile Exchange
Company type | Subsidiary |
---|---|
Industry | Business services |
Founded | 1898 |
Headquarters | Chicago, Illinois |
Products | Futures and options |
Owner | CME Group |
Website | www |
The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc", or "the Merc") is a global
Today, CME is the largest
CME also pioneered the CME SPAN software that is used around the world as the official performance bond (margin) mechanism of 50 registered exchanges, clearing organizations, service bureaus, and regulatory agencies throughout the world.
Trading platforms
Trading is conducted in two methods; an open outcry format and the CME Globex electronic system. More than 90 percent of total volume at the exchange occurs electronically on CME Globex.
Open outcry
Operating during regular trading hours (RTH), the
CME Group announced in 2021 that it will permanently close most of its physical trading pits, including those for grain trading. They had been closed since March 2020 due to the outbreak of the COVID-19 pandemic.[4]
Electronic trading
Operating virtually around the clock, today the CME Globex Trading System is at the heart of CME. Proposed in 1987, it was introduced in 1992 as the first global electronic trading platform for futures contracts. This fully electronic trading system allows market participants to trade from booths at the exchange or while sitting in a home or office thousands of miles away. On 19 October 2004, the one billionth (1,000,000,000) transaction was recorded.
When CME Globex was first launched, it used
Traders connect to CME Globex via
Merger
On October 17, 2006, Chicago Mercantile Exchange announced a merger with the Chicago Board of Trade in an $8 billion deal.[7][8] Shareholders of both companies approved the merger on July 9, 2007,[9] and the deal closed on July 12, 2007.[10][11] The overarching holding company then launched as CME Group.[9] On January 13, 2008, electronic trading at the Chicago Board of Trade shifted onto CME Globex.[12]
Investigation
In 1984, the CME was investigated by the U.S. Government Accountability Office. During this investigation, it was realized that the open-outcry system could be abused. The GAO noted that the exchange made attempts to cut down on malpractice, but that it is likely that illegal activity still occurs.[13]
Products
Chicago Mercantile Exchange was known as the Chicago Butter and Egg Board when it was founded in 1898, and futures available through the exchange were initially limited to agricultural products.
For example, as of 2017, agricultural contracts were offered on products such as wheat, corn, soybeans, and
See also
- Commodity Exchange Act
- Demutualization
- List of futures exchanges
- List of traded commodities
- Securities market participants (United States)
References
- Durica, Michael (2006). Product Development for Electronic Derivative Exchanges: The case of the German ifo business climate index as underlying for exchange traded derivatives to hedge business cycle risk. Pro Business. Berlin. ISBN 3-939533-05-X.
Further reading
- Lynn, Cari (2004). Leg the Spread: Adventures Inside the Trillion-Dollar Boys' Club of Commodities Trading. Random House/Broadway Books. ISBN 9780767908559.
- Olson, Erika (2010). Zero-Sum Game: The Rise of the World's Largest Derivatives Exchange. Wiley.
- Rodengen, Jeffrey (2008). Past, Present & Futures: Chicago Mercantile Exchange. Write Stuff Syndicate.
- Tamarkin, Bob (1993). The Merc: The Emergence of a Global Financial Powerhouse. Harper Business.
- Eisen, Adrienne (2001). Making Scenes. Broadvision.
Notes
- ^ "CMEgroup.com". Investor.cmegroup.com. Archived from the original on 2017-01-16. Retrieved 2012-09-22.
- ^ Encyclopedia of American Industries. Gale. 2011. p. 2432.
- ^ "CME Trading Pit Hand Signals History". tradingpithistory.com. Retrieved 16 August 2011.
- ^ "CME permanently closes open outcry trading". World-Grain.com. 2021-05-10.
- ^ "Deflating Globex: electronic exchanges". The Economisturl-access=subscription. 21 May 1994. Archived from the original on 24 September 2018. Retrieved 24 September 2018.
- ^ "Reuters Dumped from Trading Service". Wired. 21 February 1997.
- ^ "Chicago Exchange to Buy Rival for $8 Billion". The New York Times. October 17, 2006. Retrieved November 28, 2022.
- ^ Lucchetti, Aaron; MacDonald, Alistair; Taylor, Edward (October 18, 2006). "Chicago Merc to Buy Board of Trade". The Wall Street Journal. Dow Jones & Company, Inc. Retrieved November 28, 2022.
- ^ a b Krasny, Ros (July 9, 2007). "CME buy of CBOT easily approved by shareholders". Reuters. Retrieved November 9, 2022.
- ^ Krasny, Ros (July 12, 2007). "CBOT shares to be delisted at close of trade". Reuters. Retrieved November 9, 2022.
- ^ "CME and CBOT Complete Merger Creating the Leading Global Financial Exchange". CME Group. July 12, 2007. Retrieved November 9, 2022.
- ^ Saphir, Ann (2008-03-03). "Trading Places". Crain's Chicago Business. Crain Communications Inc.
- ^ Simmons, Craig (1989), Chicago Futures Market: Initial Observations on Trade Practice Abuses, pp. 3–6
- ^ ISBN 9783662592717. Retrieved November 28, 2022.
- ^ a b c d Jay P. Pederson, ed. (2006). International Directory of Company Histories. Vol. 75. US: St. James Press.
- ISBN 9781118039380. Retrieved November 28, 2022.
- ^ "Chicago Mercantile Exchange records, 1900-2000". University of Illinois at Chicago. Retrieved January 28, 2023.
- ^ "TIMELINE-Key dates in the history of CME Group". Reuters. Retrieved January 28, 2023.
- ISBN 9780124171671. Retrieved November 28, 2022.
- ^ "Chicago Mercantile Exchange (CME)". dxFeed. Devexperts Inc. Retrieved November 29, 2022.
- S2CID 157882828.
- S2CID 247299380.
- ^ Chicago Mercantile Exchange. "Metal futures and options". CME Group. Retrieved 19 March 2023.
- ^ Benth, Espen, Jurate (2012). Modeling And Pricing In Financial Markets For Weather Derivatives. Singapore: World Scientific. p. 100.
{{cite book}}
: CS1 maint: multiple names: authors list (link) - S2CID 244457751.