During the battle for the Chicago Board of Trade (CBOT), the Chicago Mercantile Exchange (CME) lost an important asset when the Russell Investment Group chose to sign an exclusive agreement with the Intercontinental Exchange (ICE).
That development made it more important for CME Group to shore up agreements with existing index providers and they have done that, locking in an agreement with Dow Jones Indexes (DJI), which has had a long-term relationship with the CBOT. The exclusive agreement enables the CME Group to offer futures and options on futures products based on the Dow Jones Industrial Average (DJIA) and other Dow Jones indexes, which are some of the most recognized benchmarks in the financial industry.
“Dow Jones Indexes has enjoyed a 10-year partnership with the CBOT and we have the foundation for a relationship to be as strong as the CME,” says Jamie Farmer, senior director of operations at Dow Jones Indexes. “The existing strong relationship has helped drive global brand awareness of the Dow Jones name as these products are sold to large and small investors worldwide. At the same time CME Group has access to the most recognized barometer of the U.S. stock market. We are excited about the opportunities the CBOT and CME merger present for our index family and the Dow Jones brand and look forward to continuing our relationship with the new CME Group Company.”
The CBOT offered had offered the DJIA $10 futures contract, which has a $10 multiplier, since October 6, 1997, and the suite of DJI products has been expanded to include a mini-sized Dow $5 and a Big Dow DJIA $25 contract. In addition, the exchange recently began offering contracts based on the Dow Jones AIG Commodity Index Excess Return Index and the Dow Jones U.S. Real Estate Index, allowing customers more opportunities to hedge or gain exposure to an even broader array of asset classes.
“The Dow Jones Industrial Average is one of the most recognized barometers of the equity marketplace,” said CME Group Executive Chairman Terry Duffy. “We are pleased to celebrate 10 years of listing derivatives on Dow Jones Index products. In particular, we are looking forward to continuing to work with Dow Jones indexes beginning in January as we offer expanded trading opportunities to our customers when Dow Jones-related index products are offered on CME Globex® alongside our other benchmark equity indexes.”
“Renewing our commitment with Dow Jones Indexes is another important milestone in our global strategy of offering innovative and liquid benchmark contracts for our domestic and international customers,” said CME Group Chief Executive Officer Craig Donohue. “Our ongoing relationship with Dow Jones allows us to continue to list the most comprehensive array of equity index derivatives products, including small-, mid- and large-cap indexes as well as some of the mostly widely used foreign indexes.”
“CME Group took the lead introducing futures and options based on the most recognized index in the world, the Dow Jones Industrial Average. The exchange and its trading community have built an excellent trading environment for futures and options based on The Dow and, over the past ten years, global volume in derivatives based on all Dow Jones indexes has increased substantially. We look forward to this trend continuing as there are more opportunities to use this popular index,” said Dow Jones Indexes President Michael A. Petronella.
