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Globex, also known as CME Globex, is an electronic trading system used worldwide. Initially developed for the Chicago Mercantile Exchange and released in 1992, the product was adopted by markets and traders around the world to facilitate electronic trading, and it was the first electronic trading system introduced to the market. While a number of competing products have been developed by companies interested in tapping the electronic trading market, this one remains prominent in the investment community.
Unlike open outcry trading, which only runs during established hours in a given market, Globex runs continuously. This provides access to after-hours trading for anyone with an account on the system, and also allows people to execute trades with people in other countries who may be active when their markets are open. Expanding trade to the global market offers many more opportunities to traders and brokers.
Individual investors can access the system through an account with a broker. Many brokers offer Globex trading to their clients and people can get more information through their brokers, or by contacting the CME group for a list of brokers working with this product. Traders working for brokerages generally use the system through the accounts maintained by their employers.
This system works extremely rapidly, and is updated on a regular basis to increase speed and functionality. People can execute complex trades from their homes, offices, or the trading floor, and the system facilitates trades in rapid succession and multiple trades at once. This can work against investors in some cases, as when the system is down, they may lose money or miss trades. Globex crashes and other issues can cause a miniature ripple effect as investors struggle to correct their investments.
Like other electronic trading systems, there are some safeguards in place on Globex, but the system is not designed to protect investors from mistakes. The need for speed in the design means that prompts and dialog boxes asking people to confirm and double check have been eliminated in many cases, as the time it takes to confirm a trade could cost money. Some traders have experienced a steep learning curve with this product as they adjust to the system and learn the commands to execute trades. Many financial markets using this system offer Globex classes to give people a chance to learn the system in a controlled environment before they start trading in the real world.
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