Company Summary
Formed in 2007 by the merger of the Chicago Mercantile Exchange (CME) and the Chicago Board of Trade (CBOT), CME Group is the largest futures exchange in the world in terms of trading volume as well as notional value traded. Headquartered in Chicago, IL, it is the holding company for CME, CBOT, NYMEX, COMEX, NEX and their respective subsidiaries.
CME Group offers a broad range of products covering major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities and metals. Trades are executed through CME Group's electronic trading platforms, open outcry and privately negotiated transactions. CME Group also operates one of the world's leading central counterparty clearing providers through CME Clearing and CME Clearing Europe, which offer clearing and settlement services across asset classes for exchange-traded and over-the-counter derivatives.
CME Group’s clearing house clears, settles and guarantees futures and options contracts traded through its exchanges. The exchanges consist of designated contract markets for the trading of futures and options contracts. The company also clears swaps contracts through a clearing house. Thus, the majority of CME Group’s revenues are derived from clearing and transaction fees. These fees include electronic trading fees, surcharges for privately negotiated transactions and other volume-related charges for exchange-traded and cleared swaps contracts. The company's product line includes interest-rate trading, energy and equity trading contracts, foreign exchange, agricultural commodities and metal.
Notably, contract volume, and consequently revenues, tend to increase during periods of economic and geopolitical uncertainty. Apart from trading volatility, rate structure, product mix, venue and the percentage of trades executed by customers who are members compared with non-member customers shape clearing and transaction fee revenues, which contribute the lion’s share to the top line.