CME Sees $100 Million From Rapid Trading Services By 2016

CME Group Inc. (CME) anticipates the business of providing fast connections to computer-powered traders could bring in $100 million in revenue within four to five years, a senior executive said Wednesday.

The world's biggest futures-exchange operator plans to introduce co-location services for electronic traders in early 2012, and more than 100 customers have made early commitments to the program, according to CME Chief Financial Officer Jamie Parisi.

CME, which has built a specialized data center to house its electronic trading systems in the suburbs of Chicago, has estimated that the new business could generate $30 million to $40 million in revenue next year.

Such co-location services involve connecting electronic trading firms' servers directly to an exchange's trade-matching engines, with the systems operating within close proximity to cut down on the time required to transmit orders across physical distances.

Offering a uniform service to all CME customers will ensure a level playing field among high-speed traders, Parisi said Wednesday at an event hosted by Citi Investment Research.

-By Jacob Bunge, Dow Jones Newswires; 312-750-4117; jacob.bunge@dowjones.com.

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