Globex: What it is, How it Works, and History

Published

Thu, 2023-Nov-23 08:39:10

File Photo: Globex: What it is, How it Works, and History File Photo: Globex: What it is, How it Works, and History

What is Globex?

Globex is a pioneering electronic trading platform for derivatives such as futures, options, and commodity contracts across many asset classes, founded in 1992. CME Globex, developed for the Chicago Mercantile Exchange (CME), operates continually without geographic or time zone restrictions.

Globex accounts for 90% of CME Group’s volume—9 out of 10. This portal is accessible from over 150 nations and territories.

Understanding

This is a 24-hour open-access marketplace that lets players immediately trade and examine orders, prices, and other data in real-time from Sunday evening to late Friday afternoon.

Globex requires a CME Group clearing company and trading application membership. CME Group owns the Chicago Mercantile Exchange (CME) and other essential commodities exchanges, including COMEX, NYMEX, and CBOT.

The next trading day begins with the CME Globex session, usually in the afternoon or evening. Tuesday cleared orders entered Monday night. Individual asset classes have 30 to 60-minute intervals between closing and reopening their five daily sessions.

Average daily Globex trades exceed 17 million contracts.

Development

In 1987, CME Group’s “Twenty Years of CME Globex,” a 2012 study, proposed Globex as a “low-impact means of providing after-hours market coverage” for futures and options trading. The platform began on June 25, 1992, using Reuters’ technology and network infrastructure. After starting with three currency products and one Treasury note product, it swiftly added additional assets and innovated several.

The E-mini S&P 500 futures contract premiered in 1997 as a Globex-exclusive instrument. FORTUNE E-50 Index futures, E-mini Currency, and E-mini Nasdaq 100 contracts are other “e-mini” products.

In 2000, CME Group adopted an open-access policy for Globex, allowing users to trade directly without brokers. First, Globex’s average daily volume topped 1 million contracts in 2002, and then it eclipsed physical pit volume in 2004.

Globex partners with the Dubai Mercantile Exchange and the Korea Exchange.

Notably, 2007 was the first year the system topped 1 billion contracts. By 2012, Globex’s 20th anniversary, 84% of CME Group markets traded electronically.

Globex allows trading in several asset categories, including agricultural (Kansas City Board of Trade and Minneapolis Grain currency shifted to it in 2008), energy, stock indices, foreign currency, interest rates, metals, real estate, and weather. Globex-only futures and options products and open-outcry products are in the actual pits.

Conclusion

Globex is one of the first derivatives trading platforms, launched in 1992.
CME Globex, built for the Chicago Mercantile Exchange, operates roughly 24 hours daily, Sunday through Friday.
Unique and open-outcry items are available in the marketplace.

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