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CME Group announced today it will establish a second central limit order book (CLOB) for cash U.S. Treasuries, to be located in Chicago alongside its Treasury futures and options markets. The new platform, scheduled to launch in Q3 2025, aims to streamline trading between cash and derivatives markets in what the company describes as an industry first.
The Chicago-based CLOB will complement BrokerTec's existing New York operation, which remains its primary venue for cash U.S. Treasury trading with February 2025 average daily notional volume of $113 billion.
"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."
The new platform will focus on relative value strategies, allowing traders to operate in both markets from a single location. According to CME Group, this addresses a significant operational challenge faced by institutional investors.
"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."
The Chicago CLOB will offer trading in 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 for more precise hedging.
Available on Globex, the new venue leverages the existing BrokerTec API and can be accessed via clients' current CME Group connectivity. It will be available for client testing from 27 April 2025.
BrokerTec recently set an all-time single-day volume record of $1.05 trillion in average daily notional volume on 3 March 2025, while CME Group's U.S. Treasury futures and options hit a daily volume record of 40,664,890 contracts on 25 February.
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