what is the chicago mercantile exchange cme 
the chicago mercantile exchange cme colloquially known as the chicago merc is an organized exchange for the trading of futures and options the cme trades futures and in most cases options in the sectors of agriculture energy stock indices foreign exchange interest rates metals real estate and even weather understanding the chicago mercantile exchange cme founded in 1898 the chicago mercantile exchange began life as the chicago butter and egg board before changing its name in 1919 it was the first financial exchange to demutualize and become a publicly traded shareholder owned corporation in 2000 2the cme launched its first futures contracts in 1961 on frozen pork bellies in 1969 it added financial futures and currency contracts followed by the first interest rate bond and futures contracts in 1972 2creation of cme groupin 2007 a merger with the chicago board of trade created the cme group one of the largest financial exchanges in the world in 2008 the cme acquired nymex holdings inc the parent of the new york mercantile exchange nymex and commodity exchange inc comex by 2010 the cme purchased a 90 interest in the dow jones stock and financial indexes 2the cme grew again in 2012 with the purchase of the kansas city board of trade the dominant player in hard red winter wheat 2 in late 2017 the chicago mercantile exchange began trading in bitcoin futures 6according to the cme group on average it handles 3 billion contracts worth approximately 1 quadrillion annually 7 in 2021 cme group ended open outcry trading for most commodities although outcry trading continues in the eurodollar options pit 8 additionally the cme group operates cme clearing a leading central counterparty clearing provider 9the approximate total value of all cme contracts in one year cme futures and risk managementwith uncertainties always present in the world there is a demand that money managers and commercial entities have tools at their disposal to hedge their risk and lock in prices that are critical for business activities futures allow sellers of the underlying commodities to know with certainty the price they will receive for their products at the market at the same time it will enable consumers or buyers of those underlying commodities to know with certainty the price they will pay at a defined time in the future while these commercial entities use futures for hedging speculators often take the other side of the trade hoping to profit from changes in the price of the underlying commodity speculators assume the risk that the commercials hedge a large family of futures exchanges such as the cme group provides a regulated liquid centralized forum to carry out such business also the cme group provides settlement clearing and reporting functions that allow for a smooth trading venue cme is one of the only regulated markets for trading in bitcoin futures cme regulationcme is regulated by the commodity futures trading commission which oversees all commodities and derivatives contracts in the united states the cftc is responsible for oversight of brokers and merchants conducts risk surveillance of derivatives trades and investigates market manipulation and other abusive trade practices 10 it also regulates trading in virtual assets such as bitcoin chicago mercantile exchange vs chicago board of tradethe chicago board of trade cbot is another chicago based futures exchange founded in 1848 11 the cbot originally focused on agricultural products such as wheat corn and soybeans it later expanded to financial products such as gold silver u s treasury bonds and energy the cme merged with the cbot in 2006 in a move approved by shareholders of both organizations 2example of chicago mercantile exchangemost commodities can be traded anywhere but there s one you can only trade at the cme weather 4 cme is the only futures exchange to offer derivatives based on weather events allowing traders to bet on cold temperatures sunshine or rainfall in 2020 the cme traded as many as 1 000 weather related contracts per day the total notional value of futures totaled 750 million while the total notional value of options totaled 480 million 12