CME Group, Inc.

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CME Group, Inc.
CmeGroupLogo.gif
Founded July 12, 2007 (through Chicago Mercantile Exchange Holdings and CBOT Holdings merger)
Headquarters Headquarters: 20 South Wacker Drive, Chicago, IL 60606 (plus other CME Group offices domestic and international)
Key People Terrence Duffy, Executive Chairman/President; Phupinder Gill, CEO
Products Interest rate, equity index, foreign currency, commodity futures and options and alternative investments (e.g. weather, real estate)
Twitter @CMEGroup
StockTwits CMEGroup
LinkedIn Profile
Facebook CMEGroup
Website www.cmegroup.com
Releases Company News

CME Group, Inc., based in Chicago, is the world's largest derivatives exchange, offering a broad array of derivatives contracts, clearing services, market data and indexes products. The publicly traded company had a market cap of $33 billion, as of October 2016.[1]

The exchange was formed by the $11.6 billion merger in July 2007 of the 109-year-old Chicago Mercantile Exchange (CME) and the 159-year-old Chicago Board of Trade (CBOT), its former rival.[2] [3] It expanded further with its August 22, 2008 acquisition of energy and metals exchange NYMEX Holdings, Inc.[4] The two acquisitions resulted in CME Group becoming the largest U.S. futures exchange, with an estimated 98 percent of the US futures volumes, as well as the largest futures exchange in the world.

CME Group also is a joint-venture minority shareholder of S&P Dow Jones Indices, a benchmark index firm which is 24.4 percent owned by CME Group and 73 percent owned by McGraw-Hill. The partnership, announced in July 2012, provides licensing of benchmark indices, several of which are offered by CME Group as listed contracts.[5]

CME Group ranked first in global exchange volume in 2015 with over 3.5 billion contracts traded, a 2.6 percent increase from the previous year, according to the FIA Annual Volume Report.[6]

Products

CME Group offers contracts in all major asset classes:

Management Team

Contract Volume

Year Total Annual Volume Percent Change
2015 3,531,760,591 2.6%
2014 3,442,766,942 8.9%
2013 3,161,476,638 9.4%
2012 2,890,036,506 (-) 14.7%
2011 3,386,986,678 9.9%
2010 3,080,492,118 19%
2009 2,589,551,487 (-) 21%
2008 3,277,645,351 3.8%
2007 3,158,383,678 26.97%

2015

Exchange Volume Percent Change
Chicago Mercantile Exchange 1,749,610,948
Chicago Board of Trade 1,196,933,143 2.2%
New York Mercantile Exchange 585,216,500 18.2%
CME Group 3,531,760,591 2.6%

(*)Volumes include CBOT and NYMEX. [8]

Trading

The CME Group's product complex spans all major asset classes, including: futures and options on interest rates, equities indexes, currencies, commodities, energy products, precious metals and alternative investment instruments such as weather and real estate derivatives. The exchange also pushed into the OTC interest rate swaps space in 2012, offering futures and clearing of those contracts. [9]

CME Group’s trading runs largely on its electronic platform called Globex with local electronic access hubs around the world that provide trading almost 24 hours per day, six days per week.

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Clearing

The exchange is supported by CME Clearing, the exchange's central futures clearing mechanism, which settles all trades and acts as the counterparty between buyers and sellers, thus virtually guaranteeing the creditworthiness of every transaction The division clears not only its traditional futures contracts but also OTC contracts in interest rates, swaps, FX and commodities. In its history, CME Clearing has never experienced a default.

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Data Services

CME offers data services in a number of ways, including real-time disseminated data through its Market Data Platform or through licensed distributors. The exchange also offers historical data through CME DataMine, and through reports accessed via its web site. For more information, click HERE.

The group also offers a repository service for swap data through CME Swap Data Repository, a CFTC-registered Swap Data Repository service that supports interest rates, credit, commodities and FX asset classes.[26] In 2013, the European Securities and Markets Authority (ESMA) approved the CME European Trade Repository as a Trade Repository (TR) under the European Market Infrastructure Regulation (EMIR). The London-based, multi-asset trade repository accepts submission of trades across all mandated derivative asset classes, namely interest rates, FX, credit, commodities and equities.[27]

CME OTC Products

CME Group offers trading on hundreds of OTC derivatives contracts, from commodities to financial contracts. The exchange offers interest rate swaps, credit default swaps, FX and commodities such as energies, agriculture, metals and commodity index swaps.[28]

In April 2012, CME cleared its first FX OTC non-deliverable forward (NDF) trade, a Brazilian real. It also launched NDF clearing for the Chinese Renminbi Yuan, Philippine Peso, Malaysian Ringgit, Indian Rupee, Korean Won, Taiwan Dollar, Chilean Peso, Colombian Peso, Peruvian Sol, Russian Ruble and Indonesian Rupiah.[29] The exchange also offers cash settled forwards (CSFs) on 26 currency pairs.[30]

On December 3, 2012, CME Group launched trading on swap futures for two-year, five-year, 10-year and 30-year interest rate maturities. Swap futures, which require less collateral than OTC swaps, are converted or delivered as OTC swaps upon expiry and cleared by CME Clearing. [31] CME also offers other OTC products such as 51 CDX Indices, as well as cash settled forwards (CSFs) on 26 currency pairs.[32]


History

Also See: CME Group History Timeline

CME Group's history (through individual and intertwining paths of CME and CBOT) is rooted in early Chicago from grain trading in the late 1840s to the introduction of financial futures in the 1970s, to electronic trading in the early 1990s, and demutualization in the early 2000s. At the time of the merger in July 2007, the CBOT and CME were 159 and 109 years old, respectively.

Mergers, Acquisitions and Joint Ventures

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Global Partnerships

CME Group has pursued partnerships, memorandums of understanding (MOU) and other deals with exchanges, index providers and others in an effort to secure a global presence.

Exchange partners include BM&FBOVESPA, Bursa Malaysia Berhad, Dubai Mercantile Exchange, GreenX, Johannesburg Stock Exchange, Kansas City Board of Trade, Korea Exchange, Minneapolis Grain Exchange, Multi Commodity Exchange of India, National Stock Exchange of India Ltd.[51], Osaka Securities Exchange, Russian Trading System Stock Exchange and Singapore Exchange Limited.

Index partners include Dow Jones Indexes, NASDAQ, Nikkei Inc. and Standard & Poor's.[52]

For more see CME Group's "Global Presence" Page.

John Lothian News Interviews

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Resources

References

  1. CME Group Inc.. Yahoo Finance.
  2. "CME and CBOT Agree to Increase Merger Offer,” 7/6/08. CME Group.
  3. "Shareholders Approve $11.9 billion CME-CBOT Merger," 7/10/07. Seeking Alpha.
  4. "CME Group Inc. Completes Acquisition of NYMEX Holdings, Inc., Expands Its Diversified Product Offerings to Include Energy and Metals and Also Announces Preliminary Election Results". CME Group.
  5. McGraw-Hill, CME Group Start S&P Dow Jones Indices Venture. FIA.
  6. 2015 Annual Survey: Global Derivatives Volume. Futures Industry Magazine.
  7. Management Team. CME Group.
  8. Trading Volume Statistics. Futures Industry.com.
  9. Cleared OTC Interest Rate Swaps: Overview. CME Group.
  10. CME Group to close most floor-based trading in Chicago, New York. The Chicago Tribune.
  11. Ending an Era, CME Group to shutter most futures pits. Reuters.
  12. CME options traders see open outcry resisting fate of futures pits. Reuters.
  13. CME to close New York trading floor in computers' victory. Reuters.
  14. CME Direct Messenger. Reuters.
  15. CME Planning Europe Exchange To Compete With Eurex, Liffe. Bloomberg Businessweek.
  16. DERIVATIVES: CME plans European derivatives venture. IFRE.
  17. CME Europe Plans to Add Currency Options at London Venue. Bloomberg.
  18. CME Co-Location Services launch date announced. Automated Trader.
  19. CME Co-Location Services. CME Group.
  20. CME Clearing Europe Expands its Metals Offering with Two Iron Ore Contracts. CME Group.
  21. European Clearing for OTC Commodity and Financial Derivatives. CME Group.
  22. CME to push clearing rate swaps in London. FT.
  23. CME ClearPort: Celebrating Seven Years of OTC Clearing. CME Group.
  24. How Does Your Margin Grow?. Investopedia.
  25. SPAN. CME Group.
  26. CME European Trade Repository. CME Group.
  27. CME Group Announces Approval of CME European Trade Repository. PR Newswire press release.
  28. About OTC Derivatives. CME Group.
  29. CME Group Expands Multi-Asset Class OTC Offering with First Cleared FX Non-Deliverable Forward. CME Group.
  30. CME Group OTC FX Clearing. CME.
  31. CME to launch interest rate swap contract. FT.
  32. CME Group OTC Clearing. CME.
  33. CME/CBOT merger goes through. Futures Magazine.
  34. CBOT Holders Choose To Merge With CME. Forbes.
  35. "Membership at CME Group”. CME Group.
  36. CBOT Agricultural and Equity Index Products Begin Trading on CME Globex. CME Group.
  37. CME boosts NYMEX trading rights offer to $750,000 7/18/08. Dow Jones.
  38. CME 'sweetens' NYMEX offer with buyback, dividend 6/23/08. MarketWatch.
  39. Nymex Shareholders Approve $8.3 Billion Takeover by CME. New York Times.
  40. CME Group to Buy Kansas City Board of Trade for $126 Million. Bloomberg.
  41. Press Release. PR Newswire.
  42. CME Group Completes Acquisition of Kansas City Board of Trade. PR Newswire, via CME Media Room.
  43. CME to Close Kansas City Board of Trade Pits in June. Dow Jones Newswires, via NASDAQ.
  44. About S&P Dow Jones Indices. S&P Dow Jones Indices.
  45. CME-McGraw-Hill Launch S&P-Dow Jones. Zachs.
  46. About CMA. CMAVision.com.
  47. CME Group to Acquire Credit Market Analysis. Bloomberg.
  48. CME Group and Thomson Reuters to Close FXMarketSpace Joint Venture. CME Group.
  49. Who’s afraid of single-stock futures?. Medill Reports.
  50. The Wallendas Hit Wall Street. Forbes.
  51. National Stock Exchange of India and CME Group Announce Cross-Listing Relationship. PRNewswire-FirstCall.
  52. Growing Global Presence. CME Group.