By Tom Polansek
CHICAGO (Reuters) – Exchange operators in Chicago and London are making contingency plans and stepping up cleaning for open-outcry futures and options trading floors as the global spread of the new coronavirus spooks markets.
Exchanges are seeking to avoid disruptions linked to the outbreak, which has roiled equities and commodities prices worldwide. The virus can cause a sometimes fatal flu-like respiratory illness.
CME Group Inc told customers that no one who had recently visited Asia or Italy, which have been hit hard by the virus, should be on its Chicago trading floor, according to a notice sent to clients on Monday. It also restricted large tour groups and sought to keep “non-essential” visitors off the floor.
If the floor is closed, 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 raucous tradition in which traders jostled and screamed to execute orders in pits packed with people. CME closed most futures pits in 2015 after the practice declined because of computerized trading. Products like Eurodollar and grain options are still traded in pits.
Cboe Global Markets Inc said it too was restricting visitors to its trading floor in Chicago. It also replaced some fingerprint scanners with ID badge scanners at the main entry points to its building.
The London Metal Exchange, owned by Hong Kong Exchanges and Clearing Ltd, has made contingency plans to relocate or ditch open-outcry trading if the coronavirus outbreak worsens. 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 a statement.
Open-outcry traders have been known to come to work when they are sick because otherwise they do not make money. The health risks of working on a trading floor have eased as the number of traders dwindles, traders said.
(Reporting by Tom Polansek in Chicago; Additional reporting by Eric Onstad in London; Editing by Cynthia Osterman and Peter Cooney)