CME Can’t Guarantee Trader Safety When Chicago Floor Reopens

(Bloomberg) -- CME Group Inc. said it can’t guarantee the safety of workers using its options-trading floor when Chicago pits reopen.

Social distancing isn’t possible in open outcry trading environments and, as a result, the exchange will require anyone willing to resume trading on the floor to sign a waiver accepting the risks of catching the coronavirus, Chief Executive Officer Terry Duffy said at a shareholder meeting Wednesday.

Exchanges across the U.S. are preparing to slowly reopen their trading floors. While there’s still no set restart date for the Chicago pits, the earliest the floor could reopen is three weeks after the stay-at-home order is lifted in the state of Illinois, pending compliance with local, state and federal guidelines.

“I cannot stress enough that we will not be able to guarantee the safety of traders, clerks or other trading personnel that choose to access the trading floor,” Duffy told shareholders, according to a copy of his remarks on the exchange’s website. “As anyone who has traded in an open outcry pit can attest, there is no way to effectuate social distancing requirements. Solutions that may be practical for other trading environments are unworkable for our trading floors.”

CME closed the floor in March as the virus spread and states across the U.S. put stay-at-home orders in place. Other exchanges that also shut their floors are now preparing to reopen, with the New York Stock Exchange’s Arca Options floor pit in San Francisco saying it would partially reopen Monday this week. CBOE Global Markets said it would be ready to reopen its Chicago trading floor June 1, if it’s safe.

In a “good day,” about 1,100 people including clerks, exchange members and CME employees access the floor, and on average 500 to 600, Duffy said, according to a recording of the meeting posted on the bourse’s website.

CME said it will encourage anyone willing to access the floor to consult with their own doctor on whether they should return to the pits and what precautions to take.

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“It’s impossible for us to take everyone temperature, it’s impossible for us to make sure everyone keeps their masks on and be responsible for that, it would never work,” Duffy said. “And it’s impossible for us to police social distancing.”

Illinois Governor J.B. Pritzker outlined a five-phase plan on Tuesday that provides a framework for reopening businesses and other entities. Currently, Illinois is in phase 2 of the plan, which includes flattening the rate of infections.

Depending on data, public health officials will help determine when parts of the state can shift to phase 3, which has a stabilizing or declining rate of infections and would allow gatherings of as many as 10 people. The next phase caps gatherings at 50 people.

In his daily press conference in Chicago Wednesday, Pritzker said he could not comment on CME’s options trading pits potentially re-opening because he’s not aware of the circumstances.

P.J. Quaid, a corn options broker who works in the Chicago pit, said he is happy the CME finally said something about reopening the floor.

“I always thought they were premature to close the floor,” he said. “I also feel that waiting three weeks until after the governor gives the O.K. is extremely excessive. States and cities that were hit harder by this are reopening sooner and working to get back on track.”

Some traders have complained about the lack of liquidity without the options pit. Many brokers also rely on their work on the floor for their main income.

Reopening will be done in a phased manner, according to the CME, with the eurodollar options pit starting first. The CME comments posted on the website confirm an earlier Bloomberg report.

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