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The CME Group will permanently close most of their Chicago trades.



Exchanger CME Group Inc.

CME 0.32%

It said it would permanently close most of its open trading channels in Chicago, ending one of the last traces of old-world trading.

CME said on Tuesday that a number of trading channels, temporarily closed in March 2020 to prevent the spread of Covid-19, will not reopen. Many US workplaces come to life as the epidemic subsides.

Some of the CME wells shut down include those for trading in agricultural commodities where traders have scrambled over soy, wheat, cattle and pork.

Floor trading for agricultural products has existed in Chicago since the mid-19th century and is part of the longstanding legacy of the CME Group, taking its name from the Chicago Mercantile Exchange, now one of its subsidiaries. This makes floor traders almost irrelevant in most financial markets, and exchanges have closed their trading channels in Chicago and elsewhere over the past two decades.

The blackboard was used to note prices during trading on the Chicago Mercantile Exchange in the 1940s.


image:

Herbert / Hulton Archive / Getty Images

The only part of the CME trading area to remain open is the Eurodollar alternative channel, which the exchange operator reopened in August with social distance requirements and other measures to protect traders from corona. Eurodollars are a type of interest rate contract and represent one of the largest central markets of the CME.

CME is also permanently closing loopholes for futures and options trading in the S&P 500, the exchange operator said.

Traders working in the CME area before March 2020 may have to find a new job or switch to electronic trading if they haven’t done so already.

Ryan Carlson, an independent futures trader who worked on the floor of CME in the 2000s, said he was not surprised the hole was closing.

“For the people who work there, it’s sad,” said Carlson, creator of tradingpithistory.com It is a website that records the hand signals used by floor traders in various exchanges, “but everyone who works there knows that the hammer is about to hit them.”

Following the CME move, only a handful of the trading grounds remain in the United States, including the New York Stock Exchange’s Manhattan stock exchange and options trading floor, including one of Chicago’s Crosstown rival Cboe. Global Markets Inc.

Overseas, the London Metal Exchange is considering permanently closing the open ring, with traders sitting on red sofas, exchanging metals such as copper and lead, as well as CME.The LME temporarily closed the ring in March 2020 as a defense against the coronavirus. The closure has sparked a long-standing debate over whether open trading is still needed.

In 2016, CME closed the Manhattan Energy Trade Floor of the New York Mercantile Exchange, one of its subsidiaries.Next year, CME ended a daily auction on the Chicago commercial space, helping to set the price of cheese in the country by replacing it. Electronic process

Chicago trading after the Federal Reserve signaled inflation concerns in December 1999.


image:

Beth A. Keizer / Associated Press

Write to Alexander Osipovich at alexander.osipovich@dowjones.com.

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