Home Indiana Agriculture News CME Addresses Volatility in Cattle Markets with Trading Change

CME Addresses Volatility in Cattle Markets with Trading Change

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Cattle futures were added to a system that caps how many orders traders can send in relation to the number of trades they execute to curb volatility. The CME Groups made the change in time for futures trading Monday. The move was a response to a letter penned by the National Cattlemen’s Beef Association. CME Chairman Terry Duffy announced the change last week while speaking at NCBA’s Cattle Industry Convention. In its letter to the CME Groups last month, NCBA members said they suspected that high-frequency traders were causing extra volatility in the cattle markets. However, Duffy responded saying 10 percent of cattle futures trading is done by high-frequency traders, compared with roughly 50 percent of all CME trading.