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James,
The (perceived) incentive for the CME to put all its contracts on computer
would be financial - cheaper to run some computers than run a market and
sweep the floors each night (lower costs all round) - like the brilliant
idea(I think not) to halve the contract size to increase business and look
what happened!! However, if the CME is anything like London markets its
made up of members and I can see the only reason they would wish to go fully
computerised is to exclude and dominate - What you say about Intel worries
me ! (fewer players more manipulation etc..)
On Thu, 6 Aug 1998, you wrote:
>......Do you suppose all locals in the S&P will migrate to the
>screen? How would that change the price action ?
Too early too tell but I doubt it. Some of them would have
to be taught what a "screen" is (i.e. "okay, see that sort
of square thing over there with the glass front?"). Others
simply have no desire to trade in front of a tube and/or
don't think they can make any money doing so.
I'm not sure about the price action, but watching Intel
trade gives me the creeps. If the big SP goes totally
electronic and it trades anything like Intel.....yikes.
Don't know if you're aware of that game but the big MMs are
the ones taking all the money out of that market. IOW, be
prepared for =really= crappy fills and don't even think
about entering a market order.
Now, the thing is that I can't figure why the CME would be
under any pressure to list the big SP on GLOBEX (or some
other electronic system). Unlike generic products like the
Euros, FCOJ, Sugar, Bonds, etc., the CME has the exclusive
right to trade futures contracts based upon the SP500 Index;
no one else can. Why, then, would they want to change the
way it's traded?
Best regards,
Jim
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