CME Group to Launch BrokerTec U.S. Treasury Central Limit Order Book in Chicago to Streamline Trading Between Cash and Futures Markets

Rhea-AI Summary

CME Group has announced the launch of a second BrokerTec central limit order book (CLOB) for cash U.S. Treasuries in Q3 2025, co-located in Chicago alongside its Treasury futures and options markets. This industry-first initiative aims to streamline trading between cash and derivatives markets.

The new Chicago CLOB will complement BrokerTec's existing New York-based platform, which recorded an average daily notional volume of $113 billion in February 2025. The Chicago venue will focus on relative value strategies, offering all seven on-the-run benchmark U.S. Treasuries with smaller notional sizes and tighter price increments of 1/16th of a 32nd.

Notable achievements include BrokerTec's all-time single-day volume record of $1.05 trillion in ADNV on March 3, 2025, and CME Group's U.S. Treasury futures and options daily volume record of 40,664,890 contracts on February 25.

Positive

• Launch of innovative Chicago CLOB platform streamlines cash and futures trading
• Smaller notional sizes enable broader market participation
• Record-breaking trading volumes: $1.05 trillion ADNV and 40.6M futures contracts
• Enhanced price discovery and liquidity across markets
• Improved efficiency for relative value trading strategies

Negative

• Potential operational complexity managing dual CLOB platforms
• Market fragmentation risk between New York and Chicago venues

Insights

Financial Market Infrastructure Expert

CME Group's new Chicago-based BrokerTec CLOB for U.S. Treasuries represents a significant infrastructure enhancement that addresses a key market inefficiency. By co-locating cash Treasury trading with futures markets, CME eliminates the geographical separation between New York and Chicago that has created operational friction and legging risk for traders executing relative value strategies.

The strategic timing is notable amid record debt issuance and market uncertainty. This solution specifically targets spread trading with two critical improvements: smaller notional sizes aligning with futures contracts and tighter price increments (1/16th of a 32nd) for more precise hedging. These adjustments democratize access by enabling smaller firms to participate in spread trading, potentially expanding CME's client base while deepening liquidity.

Recent volume metrics underscore strong demand in this segment - BrokerTec set a single-day volume record of $1.05 trillion on March 3, while Treasury futures hit 40.6 million contracts on February 25. The new venue builds upon this momentum while creating a more integrated Treasury ecosystem.

Implementation barriers appear minimal as the platform leverages existing connectivity through Globex and the BrokerTec API. This infrastructure development strengthens CME's competitive moat by creating network effects between cash and derivatives markets, potentially generating additional transaction volumes while improving execution quality for clients engaged in cross-market strategies.

CHICAGO and LONDON, March 20, 2025 /PRNewswire/ -- CME Group, the world's leading derivatives marketplace, today announced that it will launch a second BrokerTec central limit order book (CLOB) for cash U.S. Treasuries in Q3 2025. In an industry-first, the new CLOB will be co-located in Chicago next to CME Group's deeply liquid U.S. Treasury futures and options markets to support trading between cash and derivatives markets.

"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."

"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."

BrokerTec's existing New York-based CLOB will remain its primary venue for price discovery in cash U.S. Treasuries, with February 2025 average daily notional volume (ADNV) of $113 billion. The second Chicago CLOB, operated by BrokerTec Americas LLC, will complement this offering by focusing on relative value strategies. Clients will be able to trade 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, to allow for more precise hedging.

Available on Globex, the new venue leverages the existing BrokerTec API and can be accessed via clients' existing CME Group connectivity. It will be available for client testing beginning on April 27, 2025. 

BrokerTec is a leading marketplace for benchmark cash U.S. Treasuries and U.S. and EU repo transactions. On March 3, 2025, it set an all-time single-day volume record of $1.05 trillion in ADNV traded across its dealer-to-dealer CLOB, dealer-to-client request-for-quote, and streaming platforms.

CME Group's U.S. Treasury futures and options hit an all-time daily volume record on February 25, with 40,664,890 contracts traded. 

For more information, visit https://www.cmegroup.com/chicago-CLOB.

As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. 

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc.  CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners. 

BrokerTec Americas LLC. ("BAL") is a registered broker-dealer with the U.S. Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc. (www.FINRA.org), and is a member of the Securities Investor Protection Corporation (www.SIPC.org). BAL does not provide services to private or retail customers.

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SOURCE CME Group

FAQ

When will CME Group launch the new BrokerTec CLOB in Chicago?

CME Group will launch the second BrokerTec central limit order book (CLOB) in Q3 2025, with client testing available from April 27, 2025.

What is the current trading volume on BrokerTec's New York CLOB platform?

BrokerTec's New York-based CLOB recorded an average daily notional volume (ADNV) of $113 billion in February 2025.

How will CME's new Chicago CLOB benefit traders?

The Chicago CLOB will reduce legging risk, enable smaller firms to participate through reduced notional sizes, and provide more precise hedging with tighter price increments.

What trading volume records has CME Group recently achieved?

BrokerTec set a record of $1.05 trillion ADNV on March 3, 2025, while CME's U.S. Treasury futures hit 40,664,890 contracts on February 25.

What products will be available on CME's new Chicago CLOB platform?

The platform will offer all seven of BrokerTec's on-the-run benchmark U.S. Treasuries with smaller notional sizes and 1/16th of a 32nd price increments.