By Tom Polansek
CHICAGO (Reuters) – Exchange operators in Chicago and London are making contingency plans and stepping up cleaning for the world’s last remaining open-outcry futures and options trading floors as the global spread of coronavirus spooks markets.
The exchanges are seeking to avoid disruptions linked to the virus, which has roiled equities and commodities prices worldwide.
CME Group Inc has restricted large tour groups from its trading floor in Chicago and asked customers and staff to keep out “non-essential” visitors, according to a notice sent to clients on Monday. It said no one who has recently visited Asia or Italy, which have been hit hard by the virus, should be on the floor.
If the floor is closed, all markets will remain available for trading electronically, according to CME. The company, which owns the Chicago Board of Trade and Chicago Mercantile Exchange, asked employees and clients to test their ability to connect to its systems remotely.
“Out of an abundance of caution, we disinfected the entire trading floor space over the weekend,” CME said in the notice it shared with Reuters. “We will continue our increased cleaning procedures on the floor and common areas as well.”
Open-outcry trading was a once-raucous tradition in which traders jostled and screamed to execute orders in pits packed with people. The practice has declined sharply since the rise of computerized trading. CME closed most open-outcry futures pits in 2015, although products like Eurodollar and grain options are still traded in pits.
The London Metal Exchange, owned by Hong Kong Exchanges and Clearing Ltd, has made contingency plans to relocate or ditch open-outcry trading if coronavirus worsens in Britain. In a circle of padded, red-leather seats, traders use arcane hand signals in five or 10-minute bursts of intense trading at the world’s oldest and largest market for industrial metals.
“Contingency plans for the ring are dependent on exact circumstances but could include the relocation of the ring to our recovery site in Chelmsford or, if necessary, switching from ring-based to electronic price discovery,” the LME said in an emailed statement.
The health risks of working on a trading floor have dropped as the number of open-outcry traders dwindles, traders said. Open-outcry traders have been known to come to work when they are sick because otherwise they do not make money.
“Everyone has skin in the game to make sure we follow all the cleanliness protocols,” said Virginia McGathey, president of McGathey Commodities who trades in grain options pits.
(Reporting by Tom Polansek in Chicago; Additional reporting by Eric Onstad in London; Editing by Cynthia Osterman)
