CHICAGO (Reuters) - Citigroup Inc (C.N) will close its trading desks on the Chicago Board of Trade’s grain and financial floors at the end of September and will move most of its floor staff to Citi’s office in Chicago, a source familiar with the situation told Reuters on Friday.
Citi’s move away from the storied CBOT floor is the latest in an ongoing exodus, prompted by the shift of the vast majority of trading volume in grains and other products to electronic trading platforms.
For years, Citi was a fixture in trading pits that established Chicago as the center of the world’s futures trade more than a century ago.
Citi has a sales staff of about 20 in Chicago who handle trading in interest rate products, equities and commodities. Most will keep their jobs except for those whose jobs that are tied to floor activity, such as floor runners, according to the source.
Citigroup spokesman Scott Helfman offered the following statement but would not comment further:
“Citi is committed to the futures business and we will continue to be an active market participant in the sector.”
The shift away from open-outcry trading has accelerated since June 2102, when the CME Group (CME.O), parent of the CBOT, changed the way grain futures are settled at the end of the trading day. Under the new rules, settlement prices, which had long been established solely in the open-outcry pits, became based on a blend of electronic and pit-traded values.
The change diminished the need for pit traders, some of whom have sued the exchange to reverse the new rules.
Meanwhile, the desks surrounding the CBOT grain pits continue to empty out. Last month, only about 3 percent of all CBOT corn futures, the exchange’s biggest agricultural product, were traded in the pits, exchange data showed.
“Take a look at the volumes. What necessity is there to be on the floor?”, said one longtime trader from a different firm.
Reporting by Julie Ingwersen; Editing by Bob Burgdorfer