Exchange operator CME Group Inc.
said it would permanently close most of its open-air trading floors in Chicago, ending one of the world’s last remnants of old-fashioned stock trading.
CME said on Tuesday that a number of trading pits, which were temporarily closed in March 2020 to prevent the spread of Covid-19, will not be reopened. Many U.S. jobs are reviving as the pandemic weakens.
Some of the CME pits to close include agricultural commodities pits where traders traded options for soybeans, wheat, cattle and pigs.
Trading at agricultural platforms has existed in Chicago since the mid-19th century and has long been part of the legacy of the CME Group, which derives its name from the Chicago Mercantile Exchange, which is now one of the company’s subsidiaries. The rise of e-commerce has made stock traders virtually irrelevant in most financial markets, and exchanges have closed down trading floors in Chicago and elsewhere over the past two decades.
The only part of the CME 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 form of interest rate contracts and are one of the largest CME trading platforms.
The CME is also constantly closing the pit for trading S&P 500 futures and options, the exchange operator said.
Traders who worked at the CME site prior to March 2020 may now need to find a new job or switch to e-commerce if they have not already done so.
Ryan Carlson, an independent futures trader who worked at CME in the 2000s, said he was not surprised by the closing of the pits.
“It’s sad for the people who work there,” said Mr. Carlson, creator of tradingpithistory.com, a website that documents manual signals used by stock traders on various exchanges. “But all the people who worked there knew that a hammer would fall on them.”
After the CME’s move, only a few stock trading outposts remained in the United States. These include the New York Stock Exchange trading floor in Manhattan and several options trading floors, including one from CME rival Chicago-based Cboe Global Markets Inc.
Overseas, the London Metal Exchange is considering permanently shutting down its open protest network, where traders sitting on a red couch exchange metals such as copper and lead. Like CME, LME temporarily closed the ring in March 2020 as a precaution against coronavirus. The close of trading rekindled longstanding discussions about whether open trading is still needed.
In 2016, CME closed the Manhattan trading floor of the New York Mercantile Exchange, one of its subsidiaries. The following year, CME completed a daily auction on its Chicago marketplace, which helped set the national cheese price, replacing it with an electronic procedure.
Write to Alexander Osipovich, [email protected]
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