CME Group to Close Most of Its Chicago Trading Pits Permanently -- 5th Update
By Alexander Osipovich
The exchange operator CME Group Inc. said it would permanently
close most of its open-outcry trading pits in Chicago, ending one
of the world's last vestiges of old-fashioned floor trading.
CME said Tuesday that a number of trading pits that it closed
temporarily in March 2020 to prevent the spread of Covid-19
wouldn't be reopened. Many U.S. workplaces are coming back to life
as the pandemic eases.
Some of the CME pits being shut down include pits for trading
agricultural commodities, where traders have for a long time
haggled over options on soybeans, wheat, cattle and hogs.
Floor trading for agricultural commodities has existed in
Chicago since the mid-19th century and has long been part of the
heritage of CME Group, which took its name from the Chicago
Mercantile Exchange, now one of the company's subsidiaries. The
rise of electronic trading has made floor traders nearly irrelevant
in most financial markets, and exchanges have been shutting down
trading pits in Chicago and elsewhere during the past two
The only part of CME's trading floor that will remain open is
the Eurodollar options pit, which the exchange operator reopened in
August with social-distancing requirements and other measures to
protect traders from the coronavirus. Eurodollars are a type of
interest-rate contract and represent one of CME's biggest
CME is also permanently closing its pit for the trading of
futures and options on the S&P 500, the exchange operator
Traders who worked on CME's floor before March 2020 might now
need to find new work, or switch to trading electronically, if they
haven't already done so.
Ryan Carlson, an independent futures trader who worked on CME's
floor in the 2000s, said he wasn't surprised that the pits were
"For the people who work down there, it's sad," said Mr.
Carlson, the creator of tradingpithistory.com, a website that
documents the hand signals used by floor traders at various
exchanges. "But all the people who worked there knew the hammer was
going to come down on them."
Following CME's move, only a few outposts of floor trading
remain in the U.S. Those include the New York Stock Exchange's
trading floor in Manhattan and several options trading floors,
including one at CME's crosstown rival in Chicago, Cboe Global
Overseas, the London Metal Exchange is considering permanently
closing its open-outcry ring, where traders sitting on a red couch
swap metals such as copper and lead. Like CME, the LME temporarily
closed the ring in March 2020 as a coronavirus precaution. The
closure reignited longstanding discussions over whether open-outcry
trading was still needed.
In 2016, CME shut down the Manhattan energy trading floor of the
New York Mercantile Exchange, one of its subsidiaries. The next
year, CME ended a daily auction on its Chicago trading floor that
had helped set the national price of cheese, replacing it with an
Write to Alexander Osipovich at
(END) Dow Jones Newswires
May 04, 2021 23:32 ET (03:32 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Historical Stock Chart
From Aug 2021 to Sep 2021
Historical Stock Chart
From Sep 2020 to Sep 2021