Friday, July 13, 2007

The excuse they have been waiting for...

Since the OK by shareholders, real-world plans for merging the CBOT and CME are gathering momentum. Although it has seemed obvious to many besides me, this event offers the perfect opportunity to allow open-outcry to dwindle to a spectator curiosity.
The Merc's purchase of the CBOT marks a transition from pit to electronic trading, said Caitlin Zaloom, an assistant professor at New York University and author of ``Out of the Pits: Traders and Technology from Chicago to London'' (University of Chicago Press, 238 pages, $29).

Zaloom said moving the Merc's pits to the CBOT building preserves traditional face-to-face trading, which many traders still prefer. Eventually, though, she expects trading floors to become obsolete as electronic trading takes over. [More]

Brokers who appear on the show have been remarking for months how floor traders spend much of their time watching the screens during side-by-side trade, and how volume is shifting to e-trade. The success of e-CBOT trading demonstrates that institutional investors especially like this method, and as they go, so goes the bulk of trades.

Farmers have always had a love-hate relationship with traders, associating (unfairly, it turns out) the human element of open outcry with the possibility of human manipulation. Still, producers are equally suspicious of computer transactions too.


Anonymous said...


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John Phipps said...


Thanks for reading. I'm visiting friends right now, but will try to get some info in a new post by Monday.