The Chicago Mercantile Exchange (CME) is one of the world’s largest derivatives exchanges, providing a marketplace for trading futures and options contracts across multiple asset classes including commodities, currencies, interest rates, and equity indexes. Founded in 1898, CME has evolved from trading agricultural products to becoming a global financial marketplace through mergers and acquisitions.

CME Group, formed through the merger of CME with Chicago Board of Trade (CBOT) and New York Mercantile Exchange (NYMEX), operates electronic trading platforms serving participants worldwide. The exchange provides price discovery, risk management tools, and market liquidity for institutional and individual traders. CME’s contracts serve as global benchmarks for various markets and are widely used for hedging and speculation.

Real-world example: A crude oil producer hedges price risk by selling WTI crude futures contracts on CME at $80 per barrel, locking in revenue for future production regardless of spot price fluctuations.