CME Group To Use Electronic Trade In June Corn, Soy Settlements
March 05 2012 - 11:28AM
Dow Jones News
CME Group Inc. (CME) said Monday it will start incorporating
electronic trades into settlement procedures for corn and soybean
futures in June, a couple months later than first planned.
CME said the new settlement procedures will use volume-weighted
prices both from the open-outcry trade and trading on the
exchange's electronic trading platform, Globex.
The exchange first revealed its intent to make the changes in
December. At the time, CME said it planned to implement the changes
in March or April, and that the changes would include live cattle
and lean hogs.
CME said implementation was delayed due to "significant market
feedback" following its initial announcement, along with
discussions with the Commodity Futures Trading Commission and the
need to give the market ample notification of the changes.
CME added that it has not reached a final decision on changes to
the livestock futures settlements, and that it is still discussing
the matter with the CFTC.
Electronic traders argue that it makes more sense to base
settlements on Globex activity since electronic trade volume dwarfs
pit trading activity.
Floor traders say pit settlements have played an important role
in keeping some traders on the trading floor even as Globex has
increasingly dominated trading volume. Some traders are worried the
settlement changes will chase more traders off the floor in
Chicago, although others say that the floor will remain the best
option for traders who want to execute complex options trades.
-By Ian Berry, Dow Jones Newswires; 312-750-4072;
ian.berry@dowjones.com
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