CME Group studies circuit breakers for volatile cattle markets

SAN DIEGO, Jan 29 (Reuters) - CME Group Inc, the world’s largest futures market operator, is considering implementing circuit breakers in its cattle markets after complaints about extreme volatility.

The circuit breakers could be triggered when prices decline sharply, “so people don’t get into panic-type selling on the way down,” Executive Chairman Terry Duffy told a meeting of the National Cattlemen’s Beef Association in California on Friday.

The trade group told Duffy in a letter this month that price swings were hurting producers’ ability to use CME’s futures contracts to offset the risk of raising cattle.

Duffy said high-frequency trading accounts for 10 percent of the volume in CME’s cattle markets and 50 percent of the exchange operator’s overall average daily volume. (Reporting by Tom Polansek; Editing by James Dalgleish)