CME Group has set new trading volume records in its US Libor alternative listed derivatives market, underlining strong adoption of the US risk-free rate. 

CME reported on Thursday trading volume (ADV) in Secured Overnight Financing Rate (SOFR) futures and options has been 5.1 million contracts in the year-to-date, its best year so far.. 

The Chicago-based exchange group also hit a high of open interest on Tuesday, with 60.4 million lots, as expectations of rate cuts early next year have spurred options volume, which comprised 48.3 million contracts of the total.

“As the world’s leading tools for hedging short-term interest rate risk, global market participants continue to turn to our SOFR futures and options to navigate uncertainty,” Agha Mirza, global head of rates and over-the-counter products at CME said in a statement. “We are pleased with the ongoing growth of our SOFR complex, which now exceeds the highest annual ADV that Eurodollar futures and options reached in their four-decade history.”

The US group said its SOFR futures and options, which launched in May 2018 and January 2020 respectively, now have broad participation from global banks, hedge funds, asset managers, principal trading firms and other types of traders. The US interest rate futures and options contracts are also eligible for portfolio margining against correlated futures and swaps through the CME clearing house, the group said.

The exchange has managed to retain its dominance of the US rates market after transitioning from its Libor-based Eurodollar product at the end of June. 

CME earlier this month said November ADV was its second highest ever, including a 42% spike in its interest rate complex. In its SOFR segment, options nearly doubled to 1.8 million lots a day on average in the month. Futures rose 70% year-on-year, to 4 million contracts by the same measure.

The CME and DTCC in July announced a tie-up to allow cross margining of US Treasuries and SOFR derivatives.

The US Securities and Exchange Commission on Wednesday approved final rule amendments expanding mandatory clearing to US government bonds and repo contracts.