CME, the world’s largest futures exchange, will halve its electronic trading times in a move that could lessen the threat from a planned new exchange backed by some of the world’s largest derivatives dealers. The CME Group, formed by last year’s merger of the Chicago Mercantile Exchange and the Chicago Board of Trade, will cut the time it takes for a futures transaction to trade on its Globex platform from 31 milliseconds to 16.5 milliseconds through an upgrade of its electronic system. It will also reduce the minimum increment by which a quoted price can vary, or so-called ‘tick’ size, on three of its most actively traded interest rate contracts. It also plans to allow so-called ‘block trading’ in an attempt to reduce the price impact for all users of the largest orders. The moves come only weeks after a group of 12 financial institutions unveiled plans for a rival exchange to the CME to counter its dominance in US Treasury futures in particular.
