CME Group

CME Group Inc., headquartered in Chicago, operates financial derivatives exchanges including the Chicago Mercantile Exchange, Chicago Board of Trade, New York Mercantile Exchange, and The Commodity Exchange. It is the world's largest operator of financial derivatives exchanges. Its exchanges are platforms for trading in agricultural products, currencies, energy, interest rates, metals, futures contracts, options, stock indexes, and cryptocurrencies futures. In 2022, CME Group futures and options had an average daily volume of 23.3 million contracts. Trading is conducted in two methods: an open outcry format and the CME Globex Trading System, an electronic trading platform. The company also owns 27% of S&P Dow Jones Indices.[1][2][3][4]

CME Group Inc.
TypePublic
IndustryFinancial Services
Founded1898 (1898)
HeadquartersChicago, Illinois, United States
Key people
Terrence A. Duffy
(Chairman & CEO)
John W. Pietrowicz
(CFO)
RevenueIncrease US$5.02 billion (2022)
Increase US$3.02 billion (2022)
Increase US$2.69 billion (2022)
Total assetsDecrease US$174.2 billion (2022)
Total equityDecrease US$26.88 billion (2022)
Number of employees
c. 3,460 (December 2022)
Subsidiaries
Websitecmegroup.com
Footnotes / references
[1]
President George W. Bush at the CME on March 6, 2001

The company pioneered the CME SPAN software that is used as the official performance bond (margin) mechanism of 50 registered exchanges, clearing organizations, service bureaus, and regulatory agencies.[5]

History

CME was founded in 1898 as a nonprofit corporation.[1] In 1919, it established its clearing house.[1] In 2000, CME demutualized.[1] In 2002, CME Group became a public company via an initial public offering.[1] The company acquired CBOT Holdings in 2007 in an $8 billion stock transaction.[1][6] The company acquired the New York Mercantile Exchange, owner of both the NYMEX exchange and the Commodity Exchange (COMEX), in 2008.[1][7]

In 2010, the company acquired a majority stake in Dow Jones Indexes, which was combined with S&P Global’s index business in 2012 to form S&P Dow Jones Indices, of which the company has a 27% ownership stake.[1][8][9][10]

In 2012, the company acquired the Kansas City Board of Trade, the dominant venue for the sale of hard red winter wheat, for $126 million in cash.[1][11][12]

In 2018, the company acquired NEX Group for $5.5 billion.[1][13][14]

What is Open outcry?

Operating during regular trading hours (RTH), the open outcry method consists of floor traders standing in a trading pit to call out orders, prices, and quantities of a particular commodity or its derivatives. Different colored jackets are worn by the traders to indicate what firm they are a part of. In addition, complex hand signals (called Arb) are used. These hand signals were first used in the 1970s. Today, however, headsets are also used by the brokers to communicate with the traders. The pits are areas of the floor that are lowered to facilitate communication, somewhat like a miniature amphitheater. The pits can be raised and lowered depending on trading volume. To an onlooker, the open outcry system can look chaotic and confusing, but in reality the system is a tried and true method of accurate and efficient trading. An illustrated project to record the hand signal language used in CME's trading pits has been compiled.[15]

Awards and honors
  • In 2019, CME Group was named the world's fastest growing and most valuable exchange brand for the sixth consecutive year by Brand Finance, while it had the fifth greatest brand strength.[16]
  • The company was named Exchange of the Year, Clearing House of the Year and Exchange Innovation of the Year in the 2019 Risk Awards. CME Group won in four categories at the FOW International Awards including Global Exchange of the Year, Americas Exchange of the Year, Best New Interest Rates Contract and Proprietary Traders' Exchange of the Year.
  • In 2019, CME Group was named to the Forbes list of America's Best Mid-Size Employers.[17]
  • CME Group was named to Computerworld's 2019 Best Places to work in IT list.[18]
  • In 2019, the company earned a perfect score of 100 on the Human Rights Campaign's Corporate Equality Index.[19]

See also

References
  1. "US SEC: Form 10-K CME Group Inc". U.S. Securities and Exchange Commission. February 27, 2023.
  2. Stafford, Phillip (May 9, 2019). "CME gains boost with new 'micro' futures contracts". The Financial Times.
  3. "CME looks to the futures in Europe". Futures & Options World. June 3, 2014.
  4. "CME Group: The futures of capitalism". The Economist. May 11, 2013.
  5. "CME Group to Launch Next Generation of CME SPAN Margin Methodology" (Press release). May 29, 2019.
  6. Krasny, Ros (July 9, 2007). "CME buy of CBOT easily approved by shareholders". Reuters.
  7. "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. August 22, 2008.
  8. Berman, Dennis K.; Mccracken, Jeffrey (February 11, 2010). "CME Buys 90% of Dow Jones Indexes". The Wall Street Journal.
  9. Leising, Matthew (July 2, 2012). "McGraw-Hill, CME Group Start S&P Dow Jones Indices Venture". Bloomberg.
  10. "CME 10-K for the Fiscal Year Ended December 31, 2014". February 26, 2015.
  11. "CME Group to Acquire Kansas City Board of TradePrint" (Press release). Chicago / Kansas City, Missouri. October 17, 2012.
  12. Dornbrook, James (December 3, 2012). "CME Group wraps up $126M acquisition of Kansas City Board of Trade". American City Business Journals.
  13. "CME Group Completes Acquisition of NEX, Creating a Leading Global Markets Company Across Futures, Cash and OTC" (Press release). PR Newswire. November 2, 2018.
  14. Zahid, Jasim (November 2, 2018). "CME Group completes acquisition of NEX Group". S&P Global.
  15. "CME Trading Pit Hand Signals History". tradingpithistory.com. Retrieved August 16, 2011.
  16. "CME is World's Most Valuable Exchange Brand for Sixth Year Running". Brand Finance. February 13, 2019.
  17. "America's Best Midsize Employers". Forbes.
  18. King, Julia (June 17, 2019). "Best Places to Work in IT 2019". Computerworld.
  19. "58 companies in Illinois were named LGBTQ friendly". WICS. January 21, 2020.
  • Business data for CME Group:
  • The CME Group Collections at University of Illinois at Chicago
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