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CME Group to Launch BrokerTec U.S. Treasury Central Limit Order Book in Chicago to Streamline Trading Between Cash and Futures Markets

1. CME Group will launch a second CLOB for U.S. Treasuries in Q3 2025. 2. Chicago location enhances trading between cash and futures markets. 3. New CLOB allows smaller firms to participate in spread trading. 4. BrokerTec's current CLOB saw $113 billion average daily notional volume. 5. Innovations aim to improve client experience and liquidity in volatile markets.

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Why Bullish?

The establishment of a new CLOB is expected to enhance market liquidity and efficiency, likely driving CME's trading volumes positively, reflecting historical trends where improved venues led to increased transactions. For example, prior enhancements in trading platforms led to record volumes for CME in the past.

How important is it?

The announcement reflects strategic growth in CME's product offerings, directly impacting future trading volumes and market participation. Given the increasing complexity of financial markets, CME's innovation addresses critical market needs, indicating a higher likelihood of positive outcomes.

Why Long Term?

The effects of improved liquidity and broader participation in markets will gradually manifest, as smaller firms adapt to the new trading strategies and environments facilitated by the CLOB. This mirrors past observations where platform enhancements boosted trading across multiple quarters post-launch.

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US TreasuryCMEBTPTLT
, /PRNewswire/ -- CME Group, the world's leading derivatives marketplace, today announced that it will launch a second BrokerTec central limit order book (CLOB) for cash U.S. Treasuries in Q3 2025. In an industry-first, the new CLOB will be co-located in Chicago next to CME Group's deeply liquid U.S. Treasury futures and options markets to support trading between cash and derivatives markets. "As clients navigate this period of heightened uncertainty and record debt issuance, U.S. Treasury spread trading continues to drive price discovery and liquidity across cash, futures and repo markets," said Mike Dennis, Global Head of Fixed Income, CME Group. "By launching a new trading venue, we will bring the full U.S. Treasury ecosystem closer together, delivering simplicity and efficiency for global market participants." "Until now, clients have had to manage the intricacies of deploying relative value strategies between New York and Chicago markets, which can lead to legging risk," said John Edwards, Global Head of BrokerTec. "Our new CLOB will greatly enhance the client experience for cash versus futures strategies. By allowing smaller notional sizes and adjusting minimum price increments, it will also enable smaller firms to participate in spread trading, broadening and deepening the liquidity pool and increasing matching opportunities." BrokerTec's existing New York-based CLOB will remain its primary venue for price discovery in cash U.S. Treasuries, with February 2025 average daily notional volume (ADNV) of $113 billion. The second Chicago CLOB, operated by BrokerTec Americas LLC, will complement this offering by focusing on relative value strategies. Clients will be able to trade all seven of BrokerTec's on-the-run benchmark U.S. Treasuries in smaller notional sizes to align with the futures market, and at tighter price increments of 1/16th of a 32nd, to allow for more precise hedging. Available on Globex, the new venue leverages the existing BrokerTec API and can be accessed via clients' existing CME Group connectivity. It will be available for client testing beginning on April 27, 2025.  BrokerTec is a leading marketplace for benchmark cash U.S. Treasuries and U.S. and EU repo transactions. On March 3, 2025, it set an all-time single-day volume record of $1.05 trillion in ADNV traded across its dealer-to-dealer CLOB, dealer-to-client request-for-quote, and streaming platforms. CME Group's U.S. Treasury futures and options hit an all-time daily volume record on February 25, with 40,664,890 contracts traded.  For more information, visit https://www.cmegroup.com/chicago-CLOB. As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing.  CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc.  CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners.  BrokerTec Americas LLC. ("BAL") is a registered broker-dealer with the U.S. Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (www.FINRA.org), and is a member of the Securities Investor Protection Corporation (www.SIPC.org). BAL does not provide services to private or retail customers. 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