CME Group
The liver of global finance: CME clears 30M+ contracts/day, concentrating risk to reduce it. November 2025 cooling failure halted 90% of derivatives trading—revealing what systemic dependency actually means.
On November 28, 2025, a cooling system failure at a single Illinois data center halted 90% of global derivatives trading. CME Group's systems went down, and the world discovered what concentration risk actually looks like. CME operates the world's largest financial derivatives exchanges—CME, CBOT, NYMEX, COMEX—clearing over 30 million contracts daily in interest rates, equities, energy, agriculture, metals, and now crypto. CME Clearing acts as counterparty to every trade, which means credit risk is shared rather than bilateral. This makes the system safer in normal times and catastrophically dependent on CME in abnormal ones. The company's $6.1 billion revenue in 2024 (up to record $1.7 billion quarterly in 2025) reflects that dependency: everyone pays to route through the central chokepoint. The crypto expansion tells the same story. CME overtook Binance in Bitcoin futures open interest in 2024, volumes grew 139% in 2025, and they're launching 24/7 trading in 2026. Institutional money wants regulated venues, and CME is the only game in town. That's the paradox: clearing reduces risk by concentrating it. Five US banks hold 96% of derivatives. One clearing house processes most of it. One data center's cooling system can freeze global finance. The liver detoxifies the body, but liver failure is fatal.
Five US banks hold 96% of the country's derivatives exposure. CME clears most of them. A single cooling system failure in November 2025 demonstrated that 'too central to fail' may be more dangerous than 'too big to fail.'
Key Facts
Power Dynamics
Operates CME, CBOT, NYMEX, COMEX exchanges; CME Clearing is counterparty to all cleared trades; regulated by CFTC as designated contract market and derivatives clearing organization
Near-monopoly in US interest rate and agricultural futures; becoming dominant in regulated crypto derivatives; 'too central to fail' status creates implicit government backstop
- CFTC (regulatory oversight, rule approval)
- Federal Reserve (systemic risk monitoring)
- Major clearing members (banks that post margin and absorb losses)
- Technology infrastructure (single data center vulnerability exposed in 2025)
- CFTC (primary regulator)
- Major banks (clearing members: JPMorgan, Goldman, Citi hold 96% of derivatives)
- Federal Reserve (lender of last resort for systemic events)
- Crypto exchanges (Coinbase, Binance as competitors in crypto derivatives)
- ICE (competitor in energy, owns NYSE)
Revenue Structure
CME Group Revenue Sources
- Clearing and transaction fees 75%
- Market data subscriptions 15% →
- Access and communication fees 7% →
- Other (colocation, technology) 3% →
Revenue tied to volatility (higher volatility = more trading); infrastructure concentration creates operational risk
Unlike NYSE/LSE pivot to data, CME remains transaction-dependent (75% vs 45%/34%)
Decision Dynamics at CME Group
Margin calls during March 2020 COVID volatility: intraday calls executed within hours
Bitcoin futures launch: years of regulatory discussion before December 2017 approval
CFTC approval for new products; infrastructure capacity during volume spikes
Failure Modes of CME Group
- November 2025: Cooling system failure halted 90% of global derivatives trading
- Flash crashes: 2010 Flash Crash showed algorithmic feedback loops clearing couldn't prevent
- 1987 Black Monday: CME margin calls accelerated selling
- Single point of failure: one clearing house, one data center, 90% market halt
- Dealer concentration: five banks = 96% of US derivatives exposure
- Procyclical margins: raising margins during crisis accelerates deleveraging
Major clearing member default during market stress could exhaust guarantee fund and test implicit government backstop
Biological Parallel
CME functions like the liver—processing and neutralizing the toxic bilateral credit risk that would otherwise poison the financial system. All derivatives 'blood' flows through it for clearing. This central processing makes the system safer by removing counterparty risk from individual trades. But it also creates fatal dependency: liver failure kills the organism. The November 2025 cooling incident was the financial equivalent of acute liver failure—90% of derivatives trading stopped because the central processing organ went down.