What Is Globex?
Let me tell you about Globex—it's an electronic trading platform that was the first of its kind when it launched back in 1992. You use it for derivatives like futures, options, and commodity contracts across a wide range of asset classes. Developed specifically for the Chicago Mercantile Exchange (CME), it's officially called CME Globex, and it runs continuously without being limited by geographic borders or time zones.
Trades on Globex make up 90% of CME Group's total volume—that means nine out of every ten trades happen there. The platform is accessible from more than 150 countries and foreign territories.
Key Takeaways
Introduced in 1992, Globex stands as one of the original electronic trading platforms for derivatives contracts. The system was built for the Chicago Mercantile Exchange and is known as CME Globex, operating almost 24 hours a day from Sunday through Friday. It provides both unique products and those that are traded traditionally via open-outcry.
Understanding Globex
Globex functions as an open-access marketplace, running nearly 24 hours a day from Sunday evening through late Friday afternoon. This setup lets you directly trade and view orders, prices, and other data in real-time.
To get access to Globex, you need a relationship with a CME Group clearing firm and a CME Group-certified trading application. CME Group is the parent company of the Chicago Mercantile Exchange (CME), along with other major commodity exchanges like Commodity Exchange, Inc. (COMEX), the New York Mercantile Exchange (NYMEX), and the Chicago Board of Trade (CBOT).
The start of the CME Globex session, which typically happens in the afternoon or evening, marks the beginning of the next trading day. For instance, orders entered during Monday's evening session are dated and cleared for Tuesday. There are short breaks of 30 to 60 minutes, depending on the asset class, between the close and reopening of each of the five daily sessions.
An Early Example of a CME Globex Terminal
Picture this: an early CME Globex terminal, as shown in historical images, represents the initial hardware used for this groundbreaking platform.
Daily Trading Volume
More than 17 million contracts trade daily on Globex, on average.
The Development of Globex
According to a 2012 CME Group report titled 'Twenty Years of CME Globex,' the idea for Globex first came up in 1987 as a low-impact way to provide after-hours market coverage for futures and options trading. The platform officially launched on June 25, 1992, using technology and network infrastructure from the news and wire service Reuters. It started with three currency products and one Treasury note product, but it quickly expanded to other assets and even created some new ones.
For example, the E-mini S&P 500 futures contract debuted in 1997, designed to be traded exclusively on Globex. Other special e-mini contracts include the FORTUNE E-50 Index futures, an E-mini Currency contract, and an E-mini Nasdaq 100 contract.
In 2000, CME Group introduced an open access policy for Globex, allowing you to trade directly in the system without needing a broker. This change led to a surge in business: in 2002, the average daily volume on Globex exceeded 1 million contracts for the first time, and in 2004, Globex volume surpassed physical pit volume for the first time.
Important Partnerships and Milestones
Globex is partnered with other global exchanges, including the Dubai Mercantile Exchange and the Korea Exchange. Notably, 2007 was the first year the system's volume exceeded 1 billion contracts. By 2012, on the platform's 20th anniversary, 84% of the CME Group's various markets' volume came through electronic trading on Globex.
Today, Globex serves as a site for trading in sectors like agriculture—where in 2008, the Kansas City Board of Trade and Minneapolis Grain Exchange moved their products to it—energy, stock indices, foreign exchange, interest rates, metals, real estate, and even weather. Some futures and options products are traded solely on Globex, while others are still handled in physical pits via open-outcry.
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