CME to reduce livestock futures, options trading hours


Chicago | Reuters — CME Group, the world’s largest futures market operator, plans to shorten trading hours for its livestock futures and options contracts effective Feb. 29, the exchange said in a statement Wednesday.

The exchange said the proposed changes, pending CFTC approval, for live cattle, feeder cattle and lean hog futures and options are designed to “further enhance its livestock markets” based on customer requests.

Trading hours will be reduced to align with the period of greatest liquidity in the livestock markets, according to the exchange. It said that during 2015, roughly 87 per cent of daily livestock futures and options trades occurred during the proposed hours.

CME Globex futures and options hours will be revised to 8:30 a.m. to 1:05 p.m. CT Monday to Friday. Their current trading hours are on Monday at 9:05 a.m. to 4 p.m, Tuesday through Thursday 8 a.m. to 4 p.m. and Friday 8 a.m. to 1:55 p.m.

Open outcry options hours will be adjusted to 8:30 a.m. to 1:02 p.m. CT Monday to Friday. Currently, they are traded on Monday from 9:05 a.m. to 1:02 p.m. and Tuesday through Friday at 8 a.m. to 1:02 p.m.

The daily settlement period and procedures for CME livestock contracts will remain unchanged.

Additionally, CME will conduct a public review with cattle customers to study whether a discount is warranted at its Worthing, South Dakota delivery point for live cattle futures. Worthing is about 20 km south of Sioux Falls.

And the exchange plans to form a cattle market working group with the National Cattlemen’s Beef Association (NCBA). The two will discuss other possible enhancements to CME’s cattle markets, including, but not limited to, circuit breakers and other measures to further heighten market quality.

The proposed changes comes after CME’s executive chairman Terry Duffy late last month addressed attendees at NCBA’s national convention in California regarding concerns about live cattle market volatility.

Reporting for Reuters by Theopolis Waters and Tom Polansek in Chicago.

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