CME Group Exchange Innovations in Technology and Risk ...share.thomsonreuters.com/events/pdfs/TRCS CME.pdf · CME GROUP CONFIDENTIAL © 2014 CME Group.All rights reserved. CME Group

CME GROUP CONFIDENTIAL © 2014 CME Group. All rights reserved.

CME Group – Exchange Innovations in Technology and Risk Management

William Knottenbelt

Senior Managing Director

Head of EMEA


CME Group is the world’s leading and most diverse financial exchange for trading futures and

options, in operation for more than 150 years.

• Formed by the 2007 merger of the Chicago Board of Trade and Chicago Mercantile Exchange;

followed by the 2008 acquisition of New York Mercantile Exchange.

• We offer a diverse and global product mix across commodity markets.

The World’s Leading and Most Diverse Financial Exchange


CME Group is committed to providing our customers:

3

The Role of an Exchange

Products and Liquidity Flexibility of Execution Integrity of our Markets

• To meet global hedging and

risk management needs

• Distribution to over 85

countries

• Electronic Futures on CME

Globex- via CME Direct or

any ISV

• Blocks Futures & EFRP on

CME ClearPort

• Pit Futures via Floor

• OTC Swaps via CME SEF

• Central Counterparty

Clearing

• Accessible nearly 24 hours

a day

• Transparency-defined

product specifications and

rules in open markets

• Maintaining the integrity of

our markets is THE

SINGLE most important

goal to CME Group

CME GROUP CONFIDENTIAL © 2014 CME Group. All rights reserved. 4

NYMEX- The Global Energy Marketplace

Record Volume and Liquidity in NYMEX Crude: • Record volume of 112,446 BZ contracts traded on June 12 and

average daily volume is over 75,000 for the month of June

• BZ open interest now near all-time high of over 96,000 contracts

• New WTI Crude Oil Weekly Options (LO1-LO5) traded a record

3,393 contracts on CME Globex on June 12

Weekly options for WTI and Nat Gas Launched on April 14 on

CME Globex weekly energy options have quickly been adopted by a

diverse set of traders looking for increased flexibility for hedging and

managing volatility and event driven options strategies. Available on

CME ClearPort in July.

cmegroup.com/weeklyenergyoptions

CME Group Natural Gas Basis volume continues to

grow. Biggest trading day of 2014 on June 10 when we

cleared over 83,000 sides.

Natural Gas Basis Average Daily Volume

Our Coal Markets have seen a continued increased in

market share month on month for over 2 years

For more information visit:

cmegroup.com/wedelivermore


Agricultural Update

Short Term Options Deliver Event Driven Opportunities • More than 1.7 million Weekly Grain Options have traded; including

24,712 on March 31st—the release of USDA Prospective plantings

Report.

• Market participants turned their attention to Short-Dated New Crop

Options (SDNC) as growing season began, pushing volume up 55 %

over last year.

Electronic Agricultural Options Continue to Grow • Through April, electronically traded agricultural options volume was

up 49% over same period last year

European Product Expansion

Opportunities

Cocoa

• Exploring a new futures contract on Cocoa in

response to consolidation in soft markets and

customer feedback, pending regulatory approval.

European Wheat

• Europe is a major wheat producing area – we

already have extensive customer base trading

benchmark CBOT SRW and HRW Wheat

• Customers requesting a physically delivered

European milling wheat contract, pending

regulatory approval

• Will enhance our European clients hedging

effectiveness

• Provide synergies with our current SRW & HRW

wheat contracts.

Livestock Options Fundamental drivers in the Livestock markets,

particularly hog production, have increased interest

in hedging with Livestock options:

• Lean Hog options ADV13,513, up 183%

• Live Cattle options ADV11,360, +11%


Metals Product Update Weekly Metals Options are now available

for Gold, Silver and Copper. Launched

April 14, Weekly Metals Options offer lower

premium options with shorter duration – up

to 28 days, with an expiration every Friday

– on our benchmark metals products, along

with:

• Flexibility to manage short-term

volatility and risk

• Precision timing to target specific

market movements or events

• More expirations (4 weeklies and 1

monthly); more options to limit

exposure

• Shorter expirations to gain market

exposure at a lower premium

• American style with automatic

exercise

LEARN MORE:

cmegroup.com/weeklymetalsoptions

New Physically Delivered Aluminum Futures (ALI)

launched on May 6 and have over 400 contracts of

open interest–out to June 2015.

• Simple, physically delivered monthly futures contract

• True intraday price and spread discovery across the

futures’ curve

• Transparent reporting on open interest and

warehousing

• Security through centralized clearing, guaranteed

counterparty credit and segregation of customer

funds through CME Clearing

• Daily mark-to-market of positions

• Streamlined delivery process

• Available for trading via CME Globex and CME

ClearPort nearly 24 hours a day

cmegroup.com/aluminum

© 2013 CME Group. All rights reserved. © 2013 CME Group. All rights reserved.

Key Facts • CME Clearing Europe is a separate London-based clearing

house, wholly-owned by CME Group and with its own staff,

governance arrangements and capital

• Has been established in London with the aim of offering

services as a multi-product clearing house to non-US

customers

• CME Clearing Europe is a Recognised Clearing House (RCH)

for OTC Commodity and financial derivatives, regulated by the

Financial Services Authority (FSA)

Benefits of clearing in Europe for a Non-US Customer Base • European regulatory environment and English law (including

insolvency law and clearing house statutory protections)

• European time zone

• Services tailored to European market practices

• Local proximity and easy access to our growing team of

London-based specialists

CME Clearing Europe Overview

Continuing progress being made

• More than 160 client and broker entities connected via CME

ClearPort, and CME Direct, 18 clearing firms, with additional

firms in the pipeline

• Clearing over 200 OTC Energy, Agricultural and Freight

derivative products with more new contracts in pipeline

• Launched a real-time, open access clearing solution for OTC

financial derivatives. The service initially offers clearing for IRS,

with systems and processes developed in close collaboration

with swap dealers, clearing firms and buy-side users

• Clearing services for FX and CDS are due to be launched next

• For clearing IRS via CME Clearing Europe, there are currently

10 banks connected to our platform with more in the pipeline:

BNP Paribas, Citibank, Credit Suisse International, Credit

Suisse Securities Europe Ltd, Goldman Sachs, HSBC, JP

Morgan, Morgan Stanley, Nomura & RBS (while Citi is in

process of connecting)

For further information visit

www.cmeclearingeurope.com

© 2013 CME Group. All rights reserved. © 2013 CME Group. All rights reserved.

Key Facts

• Launched on April 28, CME Europe is a London-based, FCA-

supervised Recognized Investment Exchange (RIE) operating

under English law

• Wholly owned subsidiary of CME Group with a dedicated Board

of Directors and Management Team

• Initially launched with 30 FX futures products and a suite of

biofuel contracts with additional multi-asset class products to be

launched throughout 2014 / 2015

• Leverages the global distribution of CME Globex, with

established distribution in +150 countries, as well as CME

ClearPort for block and EFRP trades

• Clearing services provided by CME Clearing Europe, a London-

based Recognized Clearing House, regulated by the Bank of

England, thus providing a single, integrated platform for clearing

and risk

CME Europe – Launched April 28

Membership Benefits

• Simplified membership structure is designed to meet the evolving

needs of regional customers, outside the US, while

accommodating local trading practices and preferences

• Straightforward and simple membership criteria

• Low one-off joining fee and automatically enrolled as a

member into CME Europe's progressive volume-linked

trading fee program

• Focused product offering for regional customers outside

the US, starting with FX and a suite of commodities futures

and expanding asset classes over time

Types of Memberships

For further information visit

cmegroup.com/europe


A Complete Suite of Solutions for Pre-Trade, Trade and Post-Trade

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CME Direct: Driving Value Across the Trading Life Cycle

PRE-TRADE TRADE POST-TRADE

Messenger CME Direct CME STP

Blasting, RFQs, Options Access CME Globex and

CME ClearPort markets

Straight-through

Processing

Any Customer

(Trader, Broker, FCMs)

Any Region Any Product


• Front-end access to NYMEX, COMEX, CME, CBOT, KCBT markets

• Depth of market view, highlighting own and firm live orders

• All CME Globex trade types and Time in Force orders supported

• Secure, easy to install and easy to use application

10

Electronic Commodities & Energy Trading on CME Direct

SIGNIFICANT GLOBAL

ADOPTION

25 FCM’s supporting

210 Firms

760 Accounts

35 Countries

Access all commodity & energy markets via an advanced, easy to use screen


Dramatically Enhanced Block and Swap Submissions

• Full support for Options and Futures

• Brokered or Single-Sided blocks

• Strategy level submission of entire

trade, including hedge

• Recent and favorite traders &

accounts

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Coupled with Advanced Block Clearing

Approximately 50% of all CME

ClearPort Brokers are now on CME

Direct

50% of all CME ClearPort

transactions are submitted via CME

Direct


Delivering enhanced options trading capabilities and opportunities

CME Direct’s newly-enhanced options functionality allows traders to send Request for Quotes (RFQs)

and execute covered and multi-leg strategies on CME Globex.

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NEW! Electronic Complex Options & RFQ's

Customers can trade their energy

options portfolio on a platform that is:

Intelligent: select or build custom

options strategies using the Strategy

Builder

Fast: instantly send RFQs to CME

Globex to discover the best, active

market

Customizable: configure grids and

arrange windows to suit your trading

needs

Feature-rich: view on-demand

theoreticals, implied volatilities and

Greeks with QuikStrike analytics


Faster, simpler commodities and energy trading, charting, and analysis

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NEW! Exciting Integration with Thomson Reuters Eikon

Powerful execution of CME Direct combined with the robust news, charting and analysis of Thomson Reuters Eikon

• Enter and manage CME Group trades directly from your Thomson Reuters Eikon desktop

• Easily launch Reuters news items and charting and analysis


Thank You Join us for a demonstration and introduction this evening

Documents

CME Group Exchange Innovations in Technology and Risk ...share.thomsonreuters.com/events/pdfs/TRCS CME.pdf · CME GROUP CONFIDENTIAL © 2014 CME Group.All rights reserved. CME Group