CME Sees Record Volume

Terry Flanagan

Diversity in its product offerings and client base, in addition to sustained volatility, has allowed CME to experience record volumes in August.

Derivatives exchange operator CME Group had its best month ever in August, with average daily trading volume up 46 percent year-over-year.

“There was a general level of volatility, which there has been a lot of this year,” said Derek Sammann, managing director of interest rate and foreign exchange products at CME Group. “There were the events of early- to mid-August, which is a month that is typically slow. There was a lot of uncertainty, like there has been all summer.”

But as Sammann adds, there was a lot more to the equation than unforeseen volatility.

“When you look at the level of activity, it wasn’t concentrated in one asset class,” said Sammann. “All asset classes showed growth. Volatility was introduced in early August, this did not lead to any de-risking. We had a record high with 17.1 million average daily volume in August, as well as all-time record high in open interest.”

Sammann noted that this was in stark contrast to late 2008 and early 2009, in the post Lehman Brothers landscape. “There were spikes in volume but a decrease in open interest. People were trading a lot, but closing down risk. Now people are continuing to trade across the range of asset classes.”

CME’s crosstown rival the Chicago Board Options Exchange also posted all-time high trading volumes for August. CBOE Futures set a new record high in trading volume the fourth consecutive month, with 1.8 million contracts. Compared to July, which was its previous high, and August 2010, these are increases of 56 percent and 527 percent, respectively. Futures trading of its Volatility Index, or VIX, also established an all-time high, with 1.8 million contracts traded for the month, or 79,402 per day, a 500 percent increase from a year earlier. CME’s record setting month produced a 46 percent increase from last year, at 393 million contracts traded. Metals trading at CME was up 131 percent in the month, as investors flocked to the safety of gold.

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