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What is the Chicago Mercantile Exchange?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 21 August 2016
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    Conjecture Corporation
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Founded in 1898, the Chicago Mercantile Exchange has undergone some degree of change over the years. Originally founded as a not-for-profit organization, the Exchange underwent a merger in 2007 that helped to consolidate functions for finance trades connected with the enterprise. Plans for future mergers are currently in the works that would greatly enhance the presence of the Exchange in the financial world.

The Chicago Mercantile Exchange began life at the end of the 19th century as the Chicago Butter and Egg Board. Over time, the Exchange became an instrument for trading in a number of different types of investments. One of the foundations for the function of the Exchange was in the area of financial futures.

Throughout most of the 20th century, the Chicago Mercantile Exchange became associated with a variety of financial transactions. Interest rates, commodities, currencies, and equities became a common part of the Exchange. Over time, investment opportunities such as real estate and even investments based on weather and climate conditions became part of the Exchange.

The Chicago Mercantile Exchange also began to enter into working partnerships with other mercantile exchanges around the globe. One notable example is the establishment of a joint effort with the Singapore Exchange, known as Jade. This joint project is intended to provide both exchanges with a presence in the derivatives market.

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The dawn of the 21st century saw more changes for the Chicago Mercantile Exchange. After undergoing demutualization in 2000 and becoming a public entity in 2002, the Exchange announced the acquisition of the Chicago Board of Trade during the fourth quarter of 2006. The acquisition was completed in July of 2007 and a new name for the combined entity was announced. Dubbed the CME Group, Inc., the new entity is rumored to have one of the largest options and futures contracts outstanding of any exchange in the world. Plans for further acquisitions and mergers are anticipated, including the possible acquisition of the New York Mercantile Exchange.

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