The biggest financial exchange you have never heard of
The Economist discusses the evolution of CME Group into a more sophisticated institution with a key role in many types of financing:
- CME now boasts a market valuation of more than $20 billion, nearly twice as much as Intercontinental Exchange (ICE), another rising star in the financial firmament. The NYSE is, meanwhile, now worth less than $10 billion.
- The historically product-oriented exchange has benefited from strong "network effects". These mean that more members are better: the more trades exchanges handle, the more liquidity they can provide and the more activity they attract.
- After leading the creation of futures, which once locked in prices only of physical commodities, financial products futures now make up more than 80% of the business.
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