Futures

Your Futures Trading Day is Getting Shorter

dondawson
Don Dawson
Instructor

New Futures traders are often surprised by the multiple trading hours that many of our Futures markets have.  Stocks open at 09:30 ET and close at 16:00 ET and it doesn’t matter if it is Google or some penny stock, they all trade during the same hours.  Futures however each have their own standardized contracts and one of the features of these unique contracts is their trading sessions.

Free Trading WorkshopAnother note here is to remind traders that when changes occur, keeping up with these changes is your own personal responsibility.  Nobody is going to call or email you every time a change in the market comes along.  A professional trader is always a student of the markets and always in a learning mode.

Even when the trading pits were the only way to place orders the Futures market trading hours changed for some of the markets.  These were very rare events, but they did.  For example, the Interest Rate markets used to open at 09:00 ET and close at 15:00 each day.  Just 6 hours of trading out of 24 and, believe me, the market moved during those 6 hours.  What was nice was that the compacted time frame forced traders to get their trades in as quickly as possible, unlike today with 24 hour markets instead. Then, the Interest Rate markets began opening at 08:20 ET and closing at 15:00 ET each day to better align with the cash Bond market in New York and to allow the market to react to the 08:30 ET economic reports when they came out.  When the Interest Rate markets opened at 09:00 ET we usually had some big gaps because the reports were released 30 minutes before the Bonds traded.  The Cash Bonds would be trading during the report releases, but they could not hedge with Futures closed. Hence, a change was needed in the Futures market hours and an earlier opening time was instituted.

Markets are always changing and today is no different, if anything they are more dynamic than ever.  The recent changes at the Chicago Mercantile Exchange (CME Group) are what I wish to alert you to today.

Effective September 21, 2015, the CME Group will change the trading hours for some of its Futures markets.  In the past, when the Stock Indexes would close each day at 16:15 ET the CME Group would perform maintenance to the Globex Electronic order entry platform between the 16:15 ET close and 16:30 ET when the markets would open for the next day’s trading.  Today the Globex platform has many more markets trading on it and requires more software updates than in the past.  So the CME Group is going to extend the time needed for these updates by modifying the trading hours of certain Futures markets. The maintenance period will be 17:00 ET to 17:45 ET Monday through Thursday. From 17:45 ET to 18:00 ET will be preopen for the Globex platform when orders can be placed for the next session.  These new hours will shorten the trading day by 15 minutes.

Products on the following Exchanges will be impacted:

  • CME Equity Indexes
  • Chicago Board of Trade Equity Index
  • Comex Metals
  • Nymex Energy
  • Dubai Mercantile Exchange Energy (DME) (CME Group has a strategic partnership with this Exchange)

The following table will show the new trading hours for the markets impacted as of September 21, 2015.

Futures Trading Hours

As an added note, the CME Group changed the trading hours for the Grain markets as well a few months ago.  The new trading hours will be:

20:00ET open to 08:45ET – Suspend trade and resume at 09:30 ET to 14:20ET close.

For short timeframe traders you will need to be aware of these changes so you don’t accidentally carry a position over into the overnight session and be required to use full margin to trade with.

“Let us learn to appreciate there will be times when the trees will be bare, and look forward to the time when we may pick the fruit.”  Peter Seller.

Don Dawson

Disclaimer
This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.