What is Globex? — Executive summary
– Globex (CME Globex) is the Chicago Mercantile Exchange’s electronic trading platform for futures, options and other derivatives. Launched in 1992, it was the first global, electronic marketplace of its kind and now handles the vast majority of CME Group trading volume. Globex runs nearly 24 hours a day from Sunday evening through late Friday afternoon, provides real‑time order books to participants worldwide, and supports a broad set of asset classes including interest rates, equity indexes, energy, metals, FX, agriculture and more. (Investopedia; CME Group)
Key facts
– First launched: June 25, 1992 (built initially on Reuters infrastructure). (Investopedia)
– Open access policy introduced: 2000 (allowed direct customer access rather than mandatory broker routing). (Investopedia)
– Share of CME Group volume: Globex trades represent roughly 90% of CME Group’s total volume. (Investopedia)
– Geographic reach: access from more than 150 countries and territories. (Investopedia)
– Average daily contract volume: more than 17 million contracts traded daily on Globex (averaged). (Investopedia; CME Group)
1. Understanding Globex: what it does and why it matters
– Marketplace function: Globex is an order‑matching, electronic marketplace that accepts, displays and executes orders for listed futures and options. It offers continuous price discovery across time zones and reduces the need to be physically present in trading pits. (Investopedia)
– Product coverage: many products are traded solely on Globex (e.g., E‑mini contracts), while others continue to have open‑outcry pit trading alongside electronic trading. Globex now hosts agriculture, energy, stock indices, FX, interest rates, metals, real estate, weather and more. (Investopedia)
– Global integration: partners with other exchanges and markets (e.g., Dubai Mercantile Exchange, Korea Exchange) and is an electronic hub for international participants. (Investopedia)
2. Short history and development
– Idea and launch: conceived in the late 1980s to provide after‑hours coverage; launched in 1992 with a small set of currency and Treasury products. (Investopedia; “Twenty Years of CME Globex,” CME Group)
– Growth milestones: E‑mini S&P 500 launched 1997 as a Globex‑centric contract; open access in 2000 drove volume growth; electronic volume surpassed pit volume in the mid‑2000s; system volume exceeded 1 billion contracts in 2007. By 2012, electronic trading accounted for ~84% of CME Group volume. (Investopedia; CME Group)
3. How Globex operates (overview)
– Continuous sessions: Globex trades nearly continuously from the Sunday evening opening to Friday afternoon closing, with short daily breaks between sessions (typically 30–60 minutes depending on asset class). The session opening that begins in the evening generally counts as the next trading day (e.g., Sunday evening session is trading for Monday). (Investopedia)
– Access model: open access means qualified customers can connect directly, provided they have a clearing relationship and a certified trading application. Market participants can place many order types and use algorithmic strategies, API access and co‑location for low latency (check CME Group connectivity documentation for specific interfaces). (Investopedia; CME Group)
– Clearing and settlement: trades executed on Globex clear through CME Group’s clearing house; participants must have a CME‑clearing firm relationship. (Investopedia)
4. Who can trade on Globex?
– Institutional participants: banks, proprietary trading firms, hedge funds, asset managers and exchanges typically connect directly via certified trading software and clearing relationships.
– Retail traders: access is usually via FCMs (futures commission merchants) or brokers that clear through CME Group; many online futures brokers provide access to Globex products without participants needing a direct CME connection. (Investopedia)
– Certification and compliance: direct access requires CME‑certified trading applications and compliance with CME connectivity, testing and regulatory requirements. (Investopedia)
5. Practical steps — how to start trading on Globex (step‑by‑step)
A. For individual/retail traders
1. Choose a regulated futures broker (FCM) that offers access to CME Globex products.
2. Open an account, complete required KYC/AML and margin agreements, and satisfy initial margin/funding requirements.
3. Select trading software/platform provided or approved by your broker (many brokers provide front ends that route orders to Globex).
4. Subscribe to market data for the specific contracts you plan to trade (real‑time data is usually fee‑based).
5. Practice with a simulator or demo environment if available to learn order types and platform features.
6. Start with clearly defined position sizing and risk limits; know contract sizes, tick values and margin requirements for instruments you trade.
7. Monitor execution, slippage and fees; adjust strategy and risk controls as needed.
B. For institutional participants or firms seeking direct access
1. Establish a clearing relationship with a CME Group clearing firm and complete legal/credit/operational onboarding.
2. Select and certify a CME‑approved trading application (or develop one and pass CME certification tests).
3. Choose connectivity method: leased lines, private network, VPN, or co‑location (if ultra‑low latency required). Consult CME Group’s connectivity and FIX/API documentation.
4. Complete CME connectivity testing and certification; obtain user IDs and production credentials.
5. Subscribe to market data and clearing reports; set up risk checks, pre‑trade limits and back‑office reporting.
6. Begin with a testing/production ramp; monitor order flow, message rates and operational resiliency.
C. For algorithmic traders
– Use the CME’s API/FIX connectivity documentation; ensure thorough pre‑trade risk controls and kill switches; test in non‑production environments; consider co‑location for latency‑sensitive strategies.
6. Trading hours, session conventions and practical notes
– General schedule: Globex is effectively open Sunday evening through Friday afternoon; exact open/close times and daily maintenance windows vary by product and exchange rules. The evening session that starts a day generally counts as the following trading day. (Investopedia)
– Verify per‑contract hours: always check the contract specification for precise trading hours, daily breaks and holiday schedules on CME Group’s website. (CME Group)
7. Advantages and limitations
Advantages
– Nearly continuous global access and extended liquidity.
– Faster executions, electronic order book transparency and programmatic trading support.
– Broad product coverage and global participant base.
– Lower dependency on physical pit attendance; improved price discovery across time zones.
Limitations and risks
– Operational risks (connectivity outages, message throttling, technical failures).
– Market risk: rapid moves can increase slippage and margin calls.
– Complexity and regulatory compliance: direct access requires significant operational, legal and capital requirements.
– During a few contract types or under certain market conditions, liquidity may still be thin and spreads wide.
8. Practical trading and risk‑management tips
– Know contract specifications: contract size, tick value, trading hours and settlement procedures.
– Use appropriate position sizing and margin buffers to withstand volatility and avoid forced liquidation.
– Use stop orders and pre‑trade risk checks, but understand stop orders do not guarantee a fill at a specific price.
– Monitor liquidity and trading volume (liquidity varies across times of day and across contracts).
– Keep robust connectivity and redundancy if you trade electronically (backup connections, disaster recovery).
– Maintain good record‑keeping for regulatory and tax purposes.
9. Common use cases
– Hedging exposures (commodities, interest rates, FX).
– Speculation via futures/options.
– Spread trades and basis strategies across CME products.
– Portfolio and risk management, pricing of derivatives using liquid benchmark instruments (e.g., E‑mini S&P 500).
10. Frequently asked questions (brief)
– Do I need to be in Chicago to trade Globex? No — Globex is an electronic platform accessible globally with appropriate broker/clearing setup. (Investopedia)
– Are all CME products traded only on Globex? No — some products remain or share trade venues with open‑outcry pits; others are electronic‑only (e.g., many E‑minis). (Investopedia)
– How to check trading hours and contract specs? Consult CME Group’s contract pages and specifications for exact hours, tick sizes and margin notes. (CME Group)
Sources and further reading
– Investopedia. “Globex.” Accessed from: https://www.investopedia.com/terms/g/globex.asp
– CME Group. “Twenty Years of CME Globex.” (CME Group report/history).
– CME Group. “Daily Exchange Volume and Open Interest” and official contract specifications/documentation (for trading hours, margins and connectivity requirements). Access via https://www.cmegroup.com/
Important disclaimer
This article is educational in nature and not investment advice. Before trading futures or options on Globex—or obtaining direct access—consult qualified legal, tax and financial professionals, and review CME Group rules, product specifications and your broker/clearing firm’s onboarding requirements.