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CME Joins Battle for Retail Bond Traders With Micro Futures

  • Contracts will rise when yields rise, fall when rates drop
  • The Small Exchange rolled out identical product in December
CME Group Headquarters Ahead Of Earnings Figures
Photographer: Christopher Dilts/Bloomberg
Updated on

CME Group Inc., whose Treasury futures already dominate among pros, is now trying to lure small traders by offering simpler-to-understand contracts that focus on the numbers the masses care most about anyway: yields.

The contracts, when they begin trading on Aug. 16, will rise when Treasury yields increase and fall when they decline -- whereas the existing futures move in the same direction as bond prices, a byzantine turnoff for many investors. The Micro Treasury Yield futures, which will compete with a similar set of products introduced last year by The Small Exchange, will come in 2-, 5-, 10- and 30-year versions. Their $10-per-basis-point price increment is much smaller than CME’s professionally targeted contracts and more digestible for retail traders.