Financial futures were first traded on global markets on May 16, 1972, when the International Monetary Market-a subsidiary of CME-began trading in futures contracts on seven global currencies. Opening day volume was 333 contracts traded. Within nine years, trading volume in financial futures on CME had surpassed that of the CME's agricultural commodities, such as cattle, hogs and pork bellies. In 2001, financial futures represented 98 percent of the record 411.7 million futures and options on futures contracts changing hands at CME.
 |
| CME Chairman Emeritus and Senior Policy Advisor Leo Melamed, New York Fed President William J. McDonough and CME Chairman Terrence A. Duffy toured CME's Eurodollar pit to mark the 30th anniversary of financial futures. |
A Chicago native, McDonough was Vice Chairman of the Board and a Director of First Chicago Corp. and its bank, First National Bank of Chicago. He was an advocate of financial futures in their early years, serving as a Director of the IMM in 1974 and 1975.
Federal Reserve Board Chairman Alan Greenspan offered a congratulatory message to CME for the anniversary celebration. He said: "U.S. and global financial markets have quite literally been transformed during the last 30 years and, without question, the International Monetary Market has played a noticeably important role in bringing about that transformation…The financial derivatives markets, which the IMM has played a critical role in developing, have significantly lowered the cost and expanded the opportunities for hedging risks that previously were not readily deflected. As a consequence, the financial system is more flexible and efficient than it was 30 years ago, and the economy itself may be more resilient to the real and financial shocks."
Professor Milton Friedman, Nobel Laureate, addressed the luncheon participants via videotape. "It's hard to recall today what the situation was like in 1971 when financial futures contracts were merely a gleam in the eye of Leo Melamed, the remarkable man who was then Chairman of the Chicago Mercantile Exchange," Friedman said. "These contracts are traded on futures exchanges around the world, and they constitute a major undertaking in the worldwide capital markets. They enable investors and traders to hedge and trade risk in a way that enables them to pursue their objectives. They have contributed to the remarkable growth in world trade over the past 30 years."
Friedman has championed financial futures since he first heard the idea from Melamed and promoted the first currency futures contracts with a feasibility paper. Currency futures were followed in 1981 by Eurodollar futures, a cash-settled short-term interest rate product that has grown to be the world's most actively traded futures contract. The concept of cash settlement also led CME to launch S&P 500 futures contracts in 1982. This product was the first successful stock index futures contract.
Chicago Mercantile Exchange Inc. (www.cme.com) is the largest futures exchange in the United States and the second largest exchange in the world for the trading of futures and options on futures. As an international marketplace, CME brings together buyers and sellers on its trading floors and GLOBEX® around-the-clock electronic trading platform. CME offers futures contracts and options on futures primarily in four product areas: interest rates, stock indices, foreign exchange and commodities. The exchange moves about $1.6 billion per day in settlement payments and manages $27.4 billion in collateral deposits. CME is a wholly owned subsidiary of Chicago Mercantile Exchange Holdings Inc.
