All block trades must be submitted via CME Direct or CME ClearPort.
CME ClearPort delivers flexible OTC clearing services across Energy, Agriculture, Equity Indices, FX, Interest Rates and Metals markets that allow participants to continue to conduct business off-exchange while maintaining the advantages of security, efficiency and certainty of a cleared transaction.
To get started, speak with your broker.
CME Direct is an exchange hosted front end that has the capabilities to enter block trades along with the ability to view block transactions once reported.
Once executed and cleared, block transactions are treated the same in terms of margin and clearing requirements, and use the existing CME Clearing model. The resulting futures contract is indistinguishable from any other futures transactions executed in that particular product. Thus, these transactions may subsequently be liquidated by an offsetting transaction executed through more conventional means on CME Globex or via open outcry in a trading pit.
A block trade may be distinguished from an EFRP in that, unlike an EFRP, it does not involve the simultaneous execution of cash or an OTC transaction. Block trades may frequently be hedged by block market makers via entering orders in the central limit order book. By contrast, an EFRP represents a market neutral transaction as it consists of a futures or options position on one side of the market and the simultaneous execution of a related cash or OTC position on the other side of the market.
An entity, such as a financial institution, insurance company or commodity pool, is classified by the Commodity Exchange Act as an eligible contract participant.
Note that regulations are subject to change and clients are responsible for determining whether or not they qualify as an ECP. Please refer to "7 U.S. Code § 1a – Definitions" to ensure you are reviewing the most current definition of an ECP.
For both futures and options spreads, each leg of a spread transaction must meet the minimum volume threshold requirement. For example, in Corn options where the threshold is set at 500 contracts, a 250 lot $4.00/$4.20 call spread (buy 250 $4 calls, sell 250 $4.20 calls) would not qualify, but a 500 lot $4.00/$4.20 call spread would.
For inter-commodity spreads, the largest threshold must be met. For example, a Corn-Soybean futures spread has a minimum volume threshold of 300. The volume threshold is set at 300 for Corn, 200 for Soybeans.
Yes, in certain products that are eligible for Trading at Settlement (TAS) pricing.
No, block trades may be negotiated at any time but must be reported through CME Direct or CME ClearPort within the applicable reporting time window.
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