CME Group to Permanently Close Most Open Outcry Trading Pits

May 4, 2021 - In a brief press release issued today, US derivatives exchange CME Group, announced that it will not reopen its physical trading pits that were closed last March due to the outbreak of the COVID-19 pandemic. In March 2020, the reason for the closure of the pits was given, "as a precaution to reduce large gatherings that can contribute to the spread of coronavirus in line with the advice of medical professionals." No reason was given today for the permanent closure of the physical trading pits.

The Eurodollar options pit, which was reopened last August, will remain open, allowing these contracts to continue to trade in both open outcry and electronic venues.

CME Group also announced that, subject to regulatory review, it will delist its full-size, floor-based S&P 500 futures and options contracts following the expiration of the September 2021 contracts on September 17, 2021.

Open interest that remains after the delisting will be migrated into the E-mini S&P 500 futures and options contracts that are available electronically on CME Globex. All individual trading positions will be converted into the corresponding E-mini S&P 500 contracts with the matching expiration date and strike price for options at the current 1:5 ratio.

Open-outcry floor trading in Chicago started in the mid-19th century but business has shifted to the Exchange's virtually 24-hour electronic platform Globex.

The London Metal Exchange (LME) also closed its open-outcry ring back in March 2020 due to the pandemic but in January the LME released a discussion paper proposing to permanently shut the 144 year-old metal exchange's open-outcry trading ring.

Matthew Chamberlain, LME Chief Executive made a statement along with the release of the discussion paper in January which said, “For the last 10 months, the Ring had to be temporarily closed due to the global COVID-19 pandemic. We have been clear that we will not use the pandemic as a pretext to close the Ring, and we remain committed to this; however, it is fair to observe that this period of electronic pricing has served the market well, with consistently high volumes of activity in the pricing window, easily observable by all stakeholders, and more participants with direct access."

The proposals have subsequently faced a backlash from brokers and industrial users of the exchange.