CME sells gold, silver business to NYSE Euronext

Discussion in 'Commodity Futures' started by Johnny Walker, Mar 15, 2008.

  1. I have been a huge fan of the CBOT's gold contracts, especially the electronic live book feature and the mini contracts. Is volume going to drop off now?

    CME Group Inc. sold its gold and silver futures business to NYSE Euronext Friday for an undisclosed sum, potentially easing antitrust hurdles as the Chicago firm attempts to buy the New York Mercantile Exchange.

    Exclusive negotiations between CME Group and Nymex expire Saturday. Nymex also trades in gold and silver contracts, creating a product overlap with CME's Chicago Board of Trade that could have prompted the Justice Department to raise monopoly concerns about a deal likely worth more than $10 billion.

    Nymex had a gold and silver volume Friday of about 180,000 contracts, compared with the average daily volume of 45,000 at CME Group.

    CME Group Chairman Terry Duffy said the sale to NYSE Euronext "maintains the integrity" of an existing arrangement to trade Nymex products on CME Group's electronic platform, but the company did not comment on how the deal would impact the discussions about the merger.

    Many observers expect the merger to be announced soon, though the exact terms of the deal remain unclear.

    Previous statements by the Justice Department have bedeviled the six-week negotiations.

    The agency submitted public comments to the Treasury Department in February suggesting that the futures exchanges' ownership of clearinghouses prevented competition.

    In a footnote, the Justice Department explained that it approved the July purchase of the Chicago Board of Trade by CME Group because the two commodity markets had different product lines.

    Investors reacted to February's comments by selling off CME Group stock, launching a prolonged slump that has erased more than $1.5 billion off the initial $11.5 billion offer. CME Group shares closed Friday at $486.05, down 4.1 percent.

    Under the terms of Friday's dealCME Group will continue providing its clearing services for up to a year while the gold and silver contracts are traded via the electronic platform of Liffe, the London-based futures and options exchange owned by NYSE Euronext.

    NYSE Euronext Chief Executive Duncan Niederauer said the acquisition gives the company an entry point to the American futures industry.

    Liffe also plans to adopt the same clearing model deemed controversial by the Justice Department, a strategic decision that aligns it with other futures exchanges.
  2. the volume dropped off along time ago

    it is a pity as the commissions I find are lower with ECBOT metals
    and also their mini contracts are nice to scale in and out of
    against full size if necc.

  3. ssss


    ...Very interessed

    Gold (from author point of view) is mutiple 1000 years of tradition as investment ,Milton Friedman ideja in spot forex and CME Forex 30-40 years

    your respectfully