What Is the CME Globex?
CME Globex, launched in 1992, is a leading electronic trading platform for derivatives. It operates almost 24/7 and supports various products, both unique and traditional.
Basics
Globex, also known as CME Globex, is a prominent electronic trading platform introduced in 1992. It focuses on derivatives trading across diverse asset classes and was originally developed for the Chicago Mercantile Exchange (CME). Notably, Globex accounts for a significant portion, approximately 90%, of CME Group's total trading volume and is accessible from over 150 countries worldwide.
Globex Trading Hours and Requirements
Globex is an accessible marketplace, operating almost 24/7 from Sunday to late Friday. It enables direct real-time trading and data access. To use Globex, customers need a CME Group clearing firm relationship and a CME Group-certified trading application.
CME Group, the parent company of the Chicago Mercantile Exchange, oversees major commodity exchanges like COMEX, NYMEX, and CBOT. The CME Globex session's start, usually in the afternoon or evening, marks the beginning of the next trading day. Orders from Monday's evening session, for instance, are dated and cleared on Tuesday. Short 30 to 60-minute breaks separate the close and re-opening of each of the five daily sessions, depending on the asset class.
A Brief History of Globex
The concept of Globex, as revealed in the 2012 CME Group report "Twenty Years of CME Globex," originated in 1987 to provide after-hours coverage for futures and options trading. It officially launched on June 25, 1992, utilizing Reuters' technology and network infrastructure. Initially, it featured three currency products and one Treasury note product but rapidly expanded to include other assets and introduced innovative products like the E-mini S&P 500 futures contract in 1997.
Open Access Policy and Partnerships
An open access policy was introduced by CME Group in 2000, allowing direct trading without brokers. This move drove substantial growth, with daily volumes surpassing 1 million contracts in 2002 and surpassing pit volumes in 2004. Globex also formed partnerships with global exchanges such as the Dubai Mercantile Exchange and the Korea Exchange.
Milestones and Current State
With the volume of contracts exceeding 1 billion, Globex achieved a significant milestone in 2007. By its 20th anniversary in 2012, Globex accounted for 84% of CME Group's trading volume across various markets. Today, Globex facilitates trading in diverse sectors, including agriculture, energy, stock indices, foreign exchange, interest rates, metals, real estate, and even weather-related assets. Some products are exclusively traded on Globex, while others are still conducted through open outcry in physical pits.
Conclusion
CME Globex is a highly accessible and widely used electronic trading platform for derivatives. It has a rich history and has grown significantly since its launch in 1992, now supporting trading across diverse asset classes and facilitating direct real-time trading and data access. Its open access policy and partnerships with global exchanges have allowed for substantial growth, making it a significant player in the world of trading.