Chicago Mercantile Exchange
| Chicago Mercantile Exchange | |
| Founded | 1898 as Chicago Butter and Egg Board |
|---|---|
| Headquarters | Chicago |
| Key People | see CME Group |
| Products | Futures and options on interest rates, foreign currencies, stock indexes, commodities, and alternative investment products (e.g., real estate, weather) |
| @CMEGroup | |
| Profile | |
| Page | |
| Website | www.cmegoup.com/ |
The former Chicago Mercantile Exchange (CME) (NYSE and Nasdaq: CME), often referred to by Chicago traders as "the Merc," is a global futures and options on futures exchange that in July 2007 acquired the Chicago Board of Trade to become CME Group.[1] CME's futures and options offerings, which are about 75 percent electronically traded on the CME Globex electronic trading platform, include interest rates, equities, currencies, commodities, and alternative investment instruments including weather and real estate derivatives.
Volume at the exchange in 2017 was 1.8 million, down 2.5 percent from the previous year. [2]
History[edit]
CME was founded in 1898 as the Chicago Butter and Egg Board as a not-for-profit company.[3] In 1919, its name was changed to the Chicago Mercantile Exchange. Early planners included C.E. McNeil, S.E. Davis and O.W. Olson.[4] On the first day of trading as the CME, 3 contracts traded and a total of 8 were traded for the week.
It was after World War I that public participation of the markets was allowed.[5]
Although the CME claims in various marketing materials to have "invented"[6][7] financial futures, in fact the now defunct International Commerce Exchange, founded in 1970 by members of the New York Produce Exchange (with which it soon merged), and located in New York, was the first exchange to trade currency futures, beginning on Apr. 23, 1970, two years before the Chicago Mercantile Exchange.[8][9]
From its not-for-profit membership organization roots, the CME on Nov. 13, 2000 became the first U.S. financial exchange to demutualize into a shareholder-owned corporation. In December 2002, CME became a publicly traded company.[10]
Investors who bought the exchanges publicly traded Class A shares at the initial public offering price made total returns of nearly 3,000 percent, compared with about 340 percent for the broader stock market, but they did not get 100% of CME directors' seats - six of the 20 sitting CME directors are elected by Class B shares issued to owners of CME seats when the exchange converted from a member-owned organization to a corporation in 2000. In August of 2018, CME offered holders of Class B shares about $10 million to relinquish their control of six board seats, part of a move to trim down the board of directors.[11]
In October 2006 the exchange announced that CME and cross-town rival, the Chicago Board of Trade, intended to pursue a merger, which in July 2007 was consummated. The merged corporation is CME Group.[12] In March of 2008, the CME Group purchased the New York Mercantile Exchange for $8.9 Billion dollars. [13]
In 2008, the Chicago Board Options Exchange (CBOE) and CME reached a $1 billion settlement on a long-running a court case regarding who owns the (CBOE). The settlement ended an almost two-year lawsuit that had prevented the CBOE from merging with another exchange or going public. The settlement provided full CBOT members with an 18 percent stake in the CBOE and $300 million in cash, terms worth roughly $1 billion with a $4 billion valuation of the options market. To qualify for the settlement, CBOT members had to have valid trading rights at the CBOE and own 10,251 shares of the CME Group, which was formed in 2007 when the CME bought the CBOT. Rejected settlements ranged between $850 million and $1.3 billion.[14][15]
In late 2019 the CME took measures to rein in "runaway algorithms which caused data volumes to surge at the exchange. This volume "mainly consisted of digital messages that showed changes to quotes to buy or sell Eurodollar futures."[16]
Presidents of the Chicago Mercantile Exchange have included E.B. Harris, Clayton Yeutter, William Brodsky, Rick Kilcollin and James McNulty.
(See CME Group for additional historical highlights.)
Headquarters Locations[edit]
Through the years, the CME has moved several times to accommodate the growth of the exchange.[17] Though the exchange maintains its offices on Wacker Drive in Chicago, in 2008, floor trading of CME products was consolidated with those of the Chicago Board of Trade at the latter's old address at LaSalle and Jackson in Chicago after it merged with CME in 2007. The history of the exchange's office locations includes:
- 20 S. Wacker: 1983 to Present
- 444 West Jackson: 1972 to 1983
- 110 North Franklin: 1928 to 1972
- Lake and Wells: 1912 to 1928
- South Water Street: 1898 to 1912
CME Annual Report[edit]
- 2014 CME Annual Report
- 2013 CME Annual Report
- 2012 CME Annual Report
- 2011 CME Annual Report
- 2010 CME Annual Report
- 2009 CME Annual Report
- 2008 CME Annual Report
- 2007 CME Annual Report
- 2006 CME Annual Report
- 2005 CME Annual Report
- 2004 CME Annual Report
- 2003 CME Annual Report
- 2002 CME Annual Report
See Also[edit]
Product pages:
- CME Group 10-Year Interest Rate Swaps
- CME Group 10-Year US Treasury Note
- CME Group 2-Year US Treasury Note
- CME Group 30-Year Interest Rate Swaps
- CME Group 5-Year Interest Rate Swaps
- CME Group 5-Year US Treasury Note
- CME Group Seasonal Strip Weather Heating Degree Day
References[edit]
- ↑ CME and CBOT Complete Merger Creating the Leading Global Exchange. Chicago Board of Trade.
- ↑ FIA Volume Survey 2017. MarketVoice.
- ↑ Cme Group Inc. CNN.
- ↑ Futures Trading in Livestock Part 1. Farmdoc.
- ↑ History of the Chicago Mercantile Exchange. Google Books.
- ↑ We Invented Financial Futures. CME Group.
- ↑ Negotiating a Market, Performing Theory: The Historical Sociology of a Financial Derivatives Exchange. Paper by Donald MacKenzie and Yuval Millo presented at European Association for Evolutionary Political Economy conference, Siena, November 8-11, 2001.
- ↑ Trading Organizations. U.S. Commodity Futures Trading Commission.
- ↑ Who is Murray Borowitz?. John Lothian News.
- ↑ Prospectus. U.S. Securities Exchange Commission.
- ↑ Finally, CME honors its investors. Crain's Chicago Business.
- ↑ FORM 425. U.S. Securities Exchange Commission.
- ↑ CME Group Agrees to Purchase NYMEX for $8.9 billion. Bloomberg.
- ↑ "CBOE and CME Settle for $1 Billion". Chicago Tribune.
- ↑ "CME-CBOE Reach $1B Deal". Crains Chicago Business News.
- ↑ "Futures Exchange Reins In Runaway Trading Algorithms". The Wall Street Journal.
- ↑ Merc Memory Lane. Chicago Suntimes.