CME Group, the world's leading and most diverse derivatives marketplace, today announced the launch of CME Direct, a new technology offering side-by-side trading of exchange-listed and over-the-counter (OTC) markets.
CME Direct will initially support trading of CME Group's benchmark energy futures markets alongside OTC energy swaps through leading inter-dealer brokers.
The exchange-listed products on CME Globex that may be traded through the CME Direct technology include NYMEX WTI crude oil, NYMEX Brent, DME Oman crude oil, RBOB Gasoline, New York Heating Oil and the benchmark Henry Hub Natural Gas futures contract. These products are part of the CME Group energy complex, which has average daily trading volumes of over 1.9 million contracts.
CME Group is licensing the CME Direct technology to leading inter-dealer brokers to offer trading of global OTC oil markets, including Marex Spectron, Tradition and Tullett Prebon. Traders will be able to execute electronically or in a hybrid, broker-assisted model on CME Direct through the participating brokers, combining the benefits of electronic trading, yet retaining the flexibility of voice brokering.
CME Direct is integrated with CME Group's OTC post-trade services, CME ClearPort for straight-through clearing to CME Clearing and CME Clearing Europe and CME ConfirmHub for straight-through processing (STP). This integration ensures OTC markets are cleared and processed quickly and without manual intervention, reducing operational overheads, errors and counterparty risk.
"At CME Group, we have a proven track record of providing our customers with advanced trading technologies that enable them to execute even the most complex and demanding of trades," said Bryan Durkin, COO and MD, Products & Services, at CME Group. "With the introduction of CME Direct, we are offering our clients a new way to access simultaneously our listed markets as well as OTC energy markets in a fully automated trading environment, expanding access to our global liquidity and price discovery functionality."
"By combining brokered OTC markets with CME Group's clearing and STP platforms — ClearPort and ConfirmHub — CME Direct offers the first global, fully automated front-to-back-office platform for trading CME listed and OTC energy products," said Michel Everaert, Managing Director, OTC Solutions, CME Group. "CME Direct is a big step forward for markets to comply with current and anticipated market regulations, including those proposed under the Dodd-Frank Act and MIFID that call for more transparency, automated trading, data reporting and clearing in OTC markets."