The Chicago Board of Trade (CBOT) was established on April 3, 1848. It was the very first futures exchange on U.S. soil. Over the next fifty years the CBOT laid a lot of the groundwork for today’s futures markets. In 1851 for example, the first “forward” contract for 3,000 bushels of corn was established. The Chicago Butter and Egg Board spun off from the CBOT in 1898. At the time, nobody new that the Chicago Butter and Egg Board would become the foundation for a global behemoth exchange group now knows as the Chicago Mercantile Exchange (CME) Group, Inc.
In the past couple of years the CME Group, formerly known as just the CME, went on a merging and acquisitions buying spree. Included in those buyouts was the CME’s purchase of its former cross town rival; who also happened to be the exchange responsible for its founding: the CBOT. The announcement of the acquisition came on Oct. 17, 2006. The buyout was almost snag free save an additional offer by the Intercontinental Exchange Inc. (ICE). It did force the CME to sweeten up the deal a little bit. The deal was finalized on July 9, 2007 with a price tag of $8 billion. The CME officially became known as the CME Group. As a result of the acquisition the CBOT grains contracts became a division of CME futures markets; consequently, the CME Group became the global leader in grain futures trading. The CME Group didn’t sit on its acquisition of the CBOT for very long. Nine months after the CBOT buyout was finalized, the CME Group purchased the New York Mercantile Exchange (NYMEX), and the NYMEX’s 1994 purchase of the Commodity Exchange (COMEX). The grand total of the acquisition was $8.9 billion in cash and stock. The CME’s most recent acquisition made it the largest exchange group in the world even larger.
Another major contribution to market products was the release of the CME futures electronic platform. The Globex electronic trading system has been both revolutionary in its innovation of electronic trading and an overwhelming leader in volume. Exchanges across the United States use the Globex platform. It’s also used around the world on exchanges including: BM&F Bovespa (market leader in Latin America), KRX Korea Exchange, and the DME Dubai Mercantile Exchange Group. The CME futures markets and their Globex platform are now used all over the world with trading conducted nearly 24 hours a day to service these global needs.
Trading in futures and options involves a substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.
