|
PureBytes Links
Trading Reference Links
|
Leo Karl wrote:
>
> Could some of you who are familiar with the inner workings of the Pits
> give me an objective opinion on the feasibility of replacing the Pits
> with a computer?
>
> On the one hand, it seems that a computer could be programmed to do
> quick, fair, and accurate matching of orders to buy and sell. On the
> other hand, since the possible benefits that a computer might offer
> have
> never been employed, I have to assume that I just don't understand the
> fundamental, logical reasons that make the somewhat chaotic pit a
> better
> method of matching orders.
>
> A similar question might be asked about the role of the specialists.
>
> Can anyone explain what those reasons might be?
>
> Leo
Leo,
You've a good point here. I even see the present way of trading
in the pits ( hundreds or thousands of guys "yelling at each other")
as part of the past, the way ( and the only one ) it had to be
50, 70 years ago.
As Computer technology develops at a gigantic pace, it looks to
me even absurd to be order-executing that way.
I don't know the %, but I believe most of us traders in one way
or another use a computer as a tool to make a trading decision.
How hard ( impossible?, no ! ) would it be for,say the CME, to
create a computerized trading pit, with lots of sections /
departments for every kind of market ( Currencies, Meats, etc )
and dedicated software for order-matching, types of orders, etc.
The brokerage firms would be somehow interlaced with CME to
give and take orders and immediately send the confirmation
to their customers.
I understand a few firms are already trying / doing business
this way ( Zap Futures, one of them ). But I'm talking about
changing the WHOLE thing. No more frenzy crowd ( the guys in
the pits ),no more yelling, pushing, pulling and
chaos everywhere !. ( Can you image: if ever one of those guys
fell down, he would be dead meat ! ).
Of course, this would eliminate hundreds or thousands of jobs,
but hey, this is a changing world, somehow the price for
progress has to be paid.
I hope to see this happen while I'm still trading. This could
even make traders feel more comfortable with their trading,
forget those whistle blowers broadcasting your stops, like
Bob Doeden suspects may be taking effect ( quite often ? ).
Anyway, this is my point of view about how the action is in
the pits nowadays :
THE OLD FASHION WAY, the "good" old days, huh !.
Regards.
Efrain R Portales.
efrain12@xxxxxxxxxxxx
|