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Finance

The CME Globex Electronic Futures Trading System

The story of the Reuters Globex futures trading system developed for the Chicago Mercantile Exchange is a classic ETS (Electronic Trading System) case study. Originally devised in 1987 and launched in 1992, the product was plagued with technical difficulties and defects, and the general reluctance of the traditionally pit-based futures trading community to accept its merits.

On its first day of business in June 1992, 2,063 futures contracts traded on CME Globex. Today, an average of more than one million contracts a day are traded on CME Globex, accounting for over 50% of total CME volume.

See http://www.cme.com/trading/get/abt/welglobex951.html

The orginal product was beset with issues, and there were still serious doubts as to whether an ETS could ever replace the open outcry system:

See http://sigchi.org/chi95/proceedings/papers/jll_bdy.htm

However, the success of Globex (although still not without its issues – see http://www.finextra.com/fullstory.asp?id=13768) is a strong validation of the potential efficiency gains that can be realised on an ETS platform.