Exchange operator CME Group Inc stated, it would close its Chicago trading floor after business hours on Friday in order to reduce potential exposure to China’s coronavirus which has gone pandemic.
China’s coronavirus, which began in Wuhan where Beijing has its only level 4 bio-safety lab, can cause deadly flu-like respiratory illness leading to death. The coronavirus has roiled equities and commodities prices across markets throughout the globe.
“The reopening of the trading floor will be evaluated as more medical guidance on the coronavirus becomes available,” said the CME Group, which owns the Chicago Board of Trade and Chicago Mercantile Exchange, in a statement.
Not a single case of coronavirus has so far been reported on the trading floor or in the Chicago Board of Trade building; the markets will remain available for trading electronically, said the CME Group.
The closure of the floor comes at a time when the markets are unusually volatile.
“The electronic market fails when the markets get crazy. Look at Sunday night – violent swings,” said PJ Quaid, an independent open-outcry corn options broker on the CME floor. “Market-makers on the screen just turn off their markets when things get bad. The pit does not do that,” said Quaid while adding: “My customers still believe in the open-outcry market.”
In an internal memo on Wednesday, the New York Stock Exchange stated, it had taken steps to help keep its floor open, including mandating separate entrances and eating spaces for floor traders and staff, as well as for employees of NYSE and parent company Intercontinental Exchange Inc who work in the office tower at 11 Wall Street.
In 2015, CME had closed most futures pits following a decline in the practice because of computerized trading. However, products including Eurodollar and grain options are still traded in pits.
The London Metal Exchange and Cboe Global Markets Inc stated, they also have contingency plans.