CME Group

CME Group Inc. operates CME, CBOT, NYMEX, and COMEX, and clears those contracts in its own clearing house. Benchmark futures on interest rates, equity indexes, energy, and agriculture trade there.

A trader who wants the liquid Treasury or crude contract has one primary venue. Liquidity concentrates where liquidity already is. That network effect is stronger than most platform stories because a futures contract is a standardized meeting place.

CME's rule that its contracts clear at its clearing house — 'vertical' integration of trade and clearing — has been attacked by rival venues and by customers who want to clear elsewhere. CME says unified clearing is safer. Challengers say it blocks a second exchange from offering the same open interest.

The exchange also sells data and connectivity. As with other venues, data fees are a bottleneck price on top of trading fees.

Benchmark contracts are single-venue markets because liquidity does not split.

Vertical clearing can be a refusal to deal with rival exchanges that want fungible open interest.

Past acquisitions of CBOT and NYMEX are why one group owns the benchmarks.

Data and colocation fees are the ongoing price complaint.

Farmers and airlines hedge on these contracts. A fee increase or a rule change is a cost of managing risk, not a consumer app.

A smaller broker pays for connectivity and clearing memberships it cannot avoid if clients want the benchmark.