CME Group announced that it will launch a second BrokerTec central limit order book (CLOB) for cash US Treasuries in Q3 2025, which will be co-located in Chicago next to CME Group’s US Treasury futures and options markets to support trading between cash and derivatives markets.
“As clients navigate this period of heightened uncertainty and record debt issuance, US Treasury spread trading continues to drive price discovery and liquidity across cash, futures and repo markets,” said Mike Dennis, global head of Fixed Income at CME Group, said in a statement. “By launching a new trading venue, we will bring the full US Treasury ecosystem closer together, delivering simplicity and efficiency for global market participants.”
“Until now, clients have had to manage the intricacies of deploying relative value strategies between New York and Chicago markets, which can lead to legging risk,” said John Edwards, global of BrokerTec, in a statement. “Our new CLOB will greatly enhance the client experience for cash versus futures strategies. By allowing smaller notional sizes and adjusting minimum price increments, it will also enable smaller firms to participate in spread trading, broadening and deepening the liquidity pool and increasing matching opportunities.”
BrokerTec’s existing New York-based CLOB will remain its primary venue for price discovery in cash US Treasuries, with February 2025 average daily notional volume (ADNV) of $113 billion. The second Chicago CLOB, operated by BrokerTec Americas, will complement this offering by focusing on relative value strategies.
Clients will be able to trade all seven of BrokerTec’s on-the-run benchmark US Treasuries in smaller notional sizes to align with the futures market, and at tighter price increments of 1/16th of a 32nd, to allow for more precise hedging.