US exchange CME Group has announced a raft of upcoming technology and interest rate product enhancements. These include upgrading the CME Globex electronic trading platform and allowing block trades for the first time on certain Chicago Board of Trade (CBOT) interest rate products. All enhancements are scheduled to be implemented in first quarter 2008.
Firstly, the exchange will launch an upgrade to the CME Globex electronic trading platform. It says this will significantly reduce message response time. During testing, under a replay of peak market conditions, the company claims the upgraded CME Globex platform demonstrated a reduction in response time of more than 50%, from an average of 31 milliseconds down to approximately 16.5 milliseconds.
Secondly, CME Group is continuing to migrate Chicago Board of Trade (CBOT) products to the CME Globex platform. On Sunday 13 January, for a trade date of 14 January, all e-cbot listed commodity and equity index products will begin trading electronically on CME Globex. CBOT interest rate products will then migrate from e-cbot to CME Globex on Sunday 27 January, for a trade date of 28 January.
Thirdly, the group intends to implement a number of enhancements in its interest rate products. Beginning on 3 March, CME Group plans to reduce the minimum tick size for three of its most actively-traded interest rate contracts – the 30-year US treasury bond futures contract and both the five-year US treasury note futures and options on futures.
To facilitate the execution of large transactions by futures and cash market participants and align the trading rules between CME and CBOT interest rate products, CME Group will also begin allowing block trades for the first time ever for certain CBOT interest rate products. Block trading in this market is expected to begin 4 February, and is subject to CFTC approval.
“Since completing our merger with CBOT last summer, our combined company has been focused on delivering tangible benefits, including new trading opportunities and increased cost and trading efficiencies, to our customers,” says CME executive chairman Terry Duffy. “The enhancements we announced today are prime examples of the new value we are creating for market users across all fronts.”