Product Benefits

E-Livestock options on CME Globex offers major benefits to the trader:

1. Liquidity
2. Transparency
3. Competitiveness

1. Liquidity
Seven major firms serve as Market Makers and publish real-time indicative quotes for CME Live Cattle and CME Lean Hog options outright contracts and spread combinations. These Market Makers are obligated to rapidly respond to any Request for Quote (RFQ) with point and click prices in the Exchange order book, which are as good as or better than current indicative prices. Each trader’s RFQ is broadcast to all participants, who can also submit orders to add liquidity.

2. Transparency
All price and trade activity on the platform is displayed real-time in a centralized and transparent fashion.  Market Makers broadcast indicative prices to the entire market and RFQs are sent to every participant simultaneously.  All participants view RFQ responses and working orders in real-time.  Trade confirmations are immediate and are anonymously broadcast system-wide.

3. Competitiveness
Because the RFQ is broadcast to all participants and the best bid and offer is easily viewable, Market Makers have a strong incentive to improve prices, narrow the bid-ask spread, and add liquidity.  The platform and market structure ensures that customers receive the best execution possible.