The U.S. Commodity Futures Trading Commission (CFTC) is evaluating whether to prevent CME Group Inc. from introducing continuous, round-the-clock trading for some crude oil and gold futures contracts. This consideration comes after CME Group announced its plans to debut these 24/7 contracts, surprising the U.S. derivatives regulator.
Regulators are particularly worried that continuous trading in crude oil futures could amplify volatility, especially during periods of geopolitical uncertainty and market stress. The proposed oil contract would be one-tenth the size of CME's existing Micro WTI futures contract and was scheduled for launch on August 30, subject to regulatory approval. CME also planned to initiate 24/7 trading for its 1-ounce gold futures contract on July 26, with both products requiring CFTC review.
This development follows CME Chief Executive Terry Duffy's recent expression of concern regarding the CFTC's decision to allow trading in perpetual cryptocurrency futures contracts, often referred to as "perps." Both CME and Intercontinental Exchange have previously urged regulators to scrutinize unregulated trading venues that offer similar products. The CFTC maintains that it evaluates perpetual futures applications on a case-by-case basis, noting that certain assets may not be suitable for such product structures.
