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CME Group completely closes most of Chicago’s trading pits

Exchange operator CME Group Co., Ltd.

CME 0.32%

He said he would permanently close most of Chicago’s open-out pits, ending one of the world’s last traces of old-fashioned open-outcry.

In an announcement on Tuesday, CME said many trading pits that were temporarily closed in March 2020 will not be reopened to prevent the Covid-19 epidemic. As the pandemic eases, many US workplaces are resurrected.

Some of the closed CME pits include pits for trading agricultural products, and traders are vying for soy, wheat, beef, and pig options.

Agricultural floor trading has existed in Chicago since the mid-19th century and was now part of the CME Group’s legacy, named after the Chicago Mercantile Exchange, one of its subsidiaries. However, the rise of e-commerce has made floor traders largely irrelevant in most financial markets, and for the past two decades exchanges have closed trading pits in Chicago and elsewhere.

The only part of CME’s trading floor that remains open is the Eurodollar Options Pit. This resumed in August when exchange operators took social distance requirements and other measures to protect traders from the coronavirus. Eurodollar is a type of interest rate contract and one of CME’s largest markets.

Exchange operators said Tuesday that CME has permanently closed the pits for trading S & P 500 futures and options.

After the relocation of CME, there are only a few floor trading outposts left in the United States. Includes trading floors on the New York Stock Exchange in Manhattan and several optional trading floors, including CME’s cross-town rival Cboe Global Markets in Chicago. Co., Ltd.

Overseas, the London Metal Exchange is considering completely closing the open outcry ring where traders sit on round red sofas and exchange metals such as copper and lead. Like CME, the LME temporarily closed the ring in March 2020 as a precautionary measure against the coronavirus, but the closure sparked long-standing debate as to whether witnessing transactions were still needed.

In 2016, CME closed the Manhattan Energy Trading Floor on the New York Mercantile Exchange, one of its subsidiaries. The following year, CME ended its daily auction on Chicago’s trading floor, which helped set domestic prices for cheese, and replaced it with an electronic process.

Write to Alexander Osipovich (alexander.osipovich@dowjones.com)

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CME Group completely closes most of Chicago’s trading pits

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