The CME Group, operator of numerous businesses such as the New York Mercantile Exchange (NYMEX), and known via its brand name from the Chicago Mercantile Exchange (CME), has today announced plans to shut down its New York (NY) trading floor by the end of 2016, according to an official company press release.
The company described the move as allowing to help floor brokers – who traditionally roam the trading floor making bids and offers on various contracts traded on and off the exchange – to move into an electronic venue. The CME Group said that its Chicago trading floor will remain open for the trading of options on futures contracts, as well as S&P 500 futures contracts, to clarify that the update was just related to the New York floor.
In addition, the NYMEX remains as a designated contract market with electronic trading not affected, as the planned changes are for the open-outcry related trading in New York, including for COMEX and NYMEX related metals and energy options contracts that were traded in the pit by floor brokers.
Options cut after futures
The press release described how declining volumes from CME Group’s NY trading floor had represented barely three-tenths of a percent of the company’s overall energy and metals trading volumes, and that the year-end closure of the floor would also be subject to review by the CFTC.
The news follows the company’s announcement last year that it would end its open outcry futures trading in New York, during which time volumes plummeted by 53% or just 7500 contracts, and futures trading was discontinued on the NY floor in July 2015, according to the update.
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Futures trading on the open outcry already ceased last year, and today’s announcement brings a date for the closure to the remaining options related contracts traded via open outcry. They will instead be traded solely electronically in the coming year at the NY location.
CME Group said that all the options products related to NYMEX and COMEX would be available for trading on CME Globex, for submission on CME Clearport, and that during Q4 2016 the company will make space for floor traders to transfer to electronic trading at the company’s One North End Avenue facility in Battery Park in Manhattan. According to people close to the news, the number of floor brokers on the New York floor is between 40 and 50 traders.