WASHINGTON (dpa-AFX) - CME Group (CME), the world's leading derivatives marketplace, Thursday has announced plans to introduce a second BrokerTec central limit order book or CLOB for cash U.S. Treasuries in the third quarter of 2025.
In an industry-first move, this new trading venue will be co-located in Chicago, alongside CME Group's liquid U.S. Treasury futures and options markets, enhancing connectivity between cash and derivatives trading.
Amid market uncertainty and record debt issuance, CME Group aims to simplify U.S. Treasury spread trading, which plays a crucial role in price discovery and liquidity. The new Chicago-based CLOB is designed to reduce risks associated with managing relative value strategies across different trading locations, improve client experience, and expand market accessibility. By allowing smaller notional sizes and tighter price increments, it will encourage participation from smaller firms, increasing liquidity and matching opportunities.
BrokerTec's existing New York-based CLOB will remain the primary venue for price discovery, averaging $113 billion in daily notional volume (ADNV) in February 2025. The Chicago venue, operated by BrokerTec Americas LLC, will complement this by focusing on relative value strategies. Traders will have access to all seven on-the-run benchmark U.S. Treasuries, with tighter price increments of 1/16th of a 32nd for more precise hedging.
Available on CME Globex, the new venue will integrate with the existing BrokerTec API, allowing seamless access through CME Group's established connectivity. Client testing begins April 27, 2025.
BrokerTec, a leading marketplace for U.S. and EU repo transactions, set a record single-day volume of $1.05 trillion across its platforms on March 3, 2025. Meanwhile, CME Group's U.S. Treasury futures and options hit a record daily volume of 40.66 million contracts on February 25, 2025.
CME is currently trading at $266.36 or 0.34% higher on the NASDAQ Global Select Market.
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