CME Group exchange operator Inc.
said it will permanently close most of its open-air trading stalls in Chicago, bringing to an end one of the last vestiges in the world of old-fashioned indoor trading.
CME said on Tuesday that a number of trading pits temporarily closed in March 2020 to prevent the spread of Covid-19 would not be reopened. Many workplaces in the United States are coming back to life as the pandemic abates.
Ground trading for agricultural products has existed in Chicago since the mid-19th century and has long been part of the legacy of the CME Group, which takes its name from the Chicago Mercantile Exchange, now one of the company’s subsidiaries. . The rise of electronic trading has made indoor traders almost irrelevant in most financial markets, and exchanges have closed trading stalls in Chicago and elsewhere for the past two decades.
The only part of CME’s trading room 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 largest marketplaces.
CME is also permanently closing its booth for trading in futures and options on the S&P 500, the exchange operator said.
Traders who worked on the CME floor before March 2020 may now need to find a new job or switch to electronic trading, if they haven’t already.
Ryan Carlson, an independent futures trader who worked on the CME floor in the 2000s, said he was not surprised at the stalls closing.
“For the people who work there, it’s sad,” said Mr. Carlson, the creator of tradingpithistory.com, a website that documents the manual signals used by ground traders on various exchanges. “But everyone who worked there knew the hammer was going to fall on them.”
As a result of CME’s decision, only a few indoor trading outposts remain in the United States, including the New York Stock Exchange trading floor in Manhattan and several options trading rooms, including one at the CME’s Chicago rival, Cboe Global Markets Inc.
Abroad, the London Metal Exchange is considering closing its open ring of outcry for good, where traders sitting on a red couch trade metals such as copper and lead. Like CME, the LME temporarily closed the ring in March 2020 as a precaution against coronaviruses. The close reignited long-standing discussions about whether auction trading was still necessary.
In 2016, CME closed the Manhattan energy floor of the New York Mercantile Exchange, one of its subsidiaries. The following year, CME ended a daily auction on its Chicago floor that had helped set the national price for cheese, replacing it with an electronic process.
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