CME Group’s stranglehold on the US futures market grew tighter with the approval of its $8.2 billion purchase of energy and metals trading market Nymex Holdings.

The Chicago-based company will now control98 per cent of the trading in US futures and options on futures, and many expect its next target will be overseas.
CME has said the Nymex transaction will close. The deal, announced in January, was contentious among some members at the New York Mercantile Exchange, who complained it undervalued Nymex at a time when energy derivatives trading volume has been exploding.
Those members threatened to scuttle the bid, even as late as last week. In the end, intense lobbying and a sweetened payout from CME secured 650 member votes in favour, or about 80 per cent, above the 75 per cent threshold it needed. “I think ‘75 per cent plus one vote’ is a great victory. The rest is irrelevant. The CME was able to get a super majority as they presented a strong proposition,” said Diego Perfumo, an analyst at Equity Research Desk.
The Nymex purchase comes just 13 months after CME swallowed the Chicago Board of Trade in July 2007, which at that point was the second-largest US futures exchange.
It will end a short run for Nymex as an independent, publicly traded exchange. The New York mart staged a long-awaited initial public offering in late 2006. “CME wants this so badly because the futures market is ... one of the few monopolies left in the world,” said Brad Hintz, an analyst at Sanford Bernstein. “And it’s a monopoly because they have their own clearing operation.”
Unlike equities and equity options, futures contracts are not “fungible,” meaning positions established at one exchange can not be offset at a competing exchange.