Chicago Mercantile Exchange (CME)

November 21, 2023 - Around 2 mins mins to read

Understanding the Chicago Mercantile Exchange (CME)

The Chicago Mercantile Exchange (CME) is a highly significant exchange in the United States that was initially established in 1898 as the “Chicago Butter and Egg Board.” It gained popularity among traders nationwide and underwent a name change in 1919 to become the Chicago Mercantile Exchange. While its early focus was on futures and stocks related to the food and beverages industry, CME has evolved into a leading exchange provider.

CME has played a revolutionary role in the American stock market. It was one of the first exchanges to offer features in 1961 and introduced the first interest bond in the US in 1972. In 2000, it became a fully shareholder-owned corporation, making a pioneering move in the industry.

In 2007, CME merged with the Chicago Board of Trade, forming the CME Group, which is now one of the largest financial exchanges globally. CME has actively acquired partial or full ownership in various exchanges across the US, including the New York Mercantile Exchange (NYMEX) and Commodity Exchange, Inc (COMEX). In 2010, CME Group acquired a 90% interest in the Dow Jones stock and financial indexes, and in 2012, it purchased the Kansas City Board of Trade.

In 2017, CME made another significant move by introducing Bitcoin futures trading, attracting considerable interest from both enterprise and private investors. The CME Group and its affiliated exchanges aim to provide a regulated and centralized environment with high liquidity, enabling investors to assume risks and capitalize on price fluctuations of different assets.

CME Group is a major player in the US exchanges industry, handling an average of approximately 3 billion contracts worth $1 quadrillion annually, according to official reports. This makes CME Group one of the most trusted exchange service providers in the US. The success of the Chicago Mercantile Exchange and its affiliates can be attributed to their constant diversification of tools and products offered to investors. The Globex platform, introduced by CME in 1987, was a pioneering effort in electronic trading. By introducing cryptocurrency futures to the global trading community, CME is leading the way in the worldwide adoption of this asset on traditional exchanges.