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Is this a dream or a nightmare? (how many of us sleep well while the market
is open?)
-----Original Message-----
From: Neil Harrington <njh@xxxxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>; 'TradeLab Mail List'
<TradeLab@xxxxxxxxxx>
Date: Wednesday, July 29, 1998 12:50 PM
Subject: Electronic Trading at the CBOT
>Saw this article on the net. Thought it would interest the groups. We have
>had some interesting discussions on this in the past.
>
>Neil
>
>_________
>
>
>CBOT BOARD APPROVES ALL-DAY COMPUTER TRADING
>
>By Greg Burns
>Tribune Staff Writer
>July 29, 1998
>
>In a major break with its past, the Chicago Board of Trade on Tuesday took
a
>step toward replacing the traditional open-outcry trading of its U.S.
>Treasury futures contracts with an electronic network.
>
>By a 20-1 vote, the exchange board approved a plan to list the flagship
>Treasury contracts on its so-called Project A computer system during the
>same daytime hours when they're being traded in the boisterous pits,
>beginning Sept. 28.
>
>The plan is subject to an Aug. 18 membership vote, as well as regulatory
>approvals. And it depends on exchange staff making Project A computer
>terminals widely available on the trading floor, and programming wallboards
>to display Project A price quotations.
>
>It would be the first time a Chicago futures exchange has offered full-size
>versions of its top contracts electronically during regular business hours.
>
>The move is aimed at fending off competition from the proposed Cantor
>Financial Futures Exchange, a computerized trading system that is seeking
>regulatory approval to list Treasury futures.
>
>Tuesday's vote was a "preemptive strike on any entity which might emerge as
>our competitor," said CBOT Chairman Patrick Arbor. "This decision
>strengthens our members' ability to compete and win in the global market."
>
>Exchange directors were worried that some of their members would use the
>Cantor exchange, unless the Board of Trade offered them daytime trading of
>bond futures, said veteran member Ray Cahnman. "If they don't pass this
>thing, the Board of Trade members skilled at Project A will trade the
Cantor
>system."
>
>The issue is certain to strike an emotive cord at the exchange. Some
traders
>believe open-outcry trading can't survive a side-by-side test against
>computers.
>
>Chicago floor traders have been shaken by the all-electronic Eurex
>Deutschland's recent takeover of German bund futures trading from the
>open-outcry London International Financial Futures Exchange.
>
>Even more shocking was the sudden demise of open-outcry futures trading at
>the Paris Matif, where an electronic system introduced side-by-side
rendered
>the pits obsolete within weeks.
>
>Yet some traders discount the fears about computers making floor traders
>obsolete. "A lot of people are scared of their own shadow," said Board of
>Trade member John Schmidt. "I think we're going to be here a long time."
>
>Even Cahnman, a booster of the Project A plan, said he expects relatively
>little business to shift from the liquid open-outcry bond pit to the
Project
>A screen, at least initially.
>
>Still, the Board of Trade's willingness to prepare for a future where
orders
>are matched on a computer instead of through the shouting and arm-waving of
>open-outcry reflects a pronounced change in sentiment.
>
>Futures exchanges worldwide are coming under pressure to computerize.
>
>Membership seat prices at open-outcry exchanges in Chicago and elsewhere
>have declined steeply recently amid worries that electronic trading will
>dominate.
>
>
>
>
>Send the text of this story to someone's email address
>
>
>
>Browse the Tribune archive for other articles
>
>
>
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