CME Group's Jack Callahan on Margin Efficiencies in a Capital Constrained World

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Some Potential Margin Offset Opportunities Can Save upwards of 80% to 90%

Over the last month we've seen a significant increase in the number of clients start clearing trades at CME, which has been exciting for us and for our customers. Many customers have been working on this for several years and it's nice to see them finally cross the finish line and start clearing their first trades.

Our customers value the ability to receive the real-time clearing message as soon as they submit the trade into CME for clearing. They don't necessarily want to worry about operations and credit risk while a trade's in pending status – they want to move on and manage their portfolios.

Many of the buy-side customers we work with are very active in both interest rate swaps and CME interest rate futures, and when we look at their portfolios, we recognize, there are some potential margin offset opportunities. Looking at some portfolios, those savings can be upwards of 80% to 90%. But when these customers look at the capital needs that are required to clear their trades, they recognize there is a significant savings in clearing those trades at CME.

We still have a lot of work to do with our customers and clearing firms to get ready for the mandate, which is just a few months away now, and we're excited about delivering a solution for our customers.

Futures & Options Trading

As the world's leading and most diverse derivatives marketplace, CME Group is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through the CME Globex electronic trading platform and trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the largest central counterparty clearing services in the world, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort.

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CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX, and COMEX.