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Re: S&P NOTICE



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I guess there is no unique answer whether floor or electronic is 
better. Electronic takes money away from the locals. However the 
locals provide liquidity.

In my opinion floor markets are better when the markets are young 
and/or not liquid. It is much better to let a broker "work" on an 
order when you want to move size in an illiquid market than flash 
yourself up on the screen.

Germany recently introduced a new electronic commodities exchange - 
the volumes are simply a joke. DTB which has large volumes works very 
well.

It might be about time for the DTB to wire a few terminals to 
chicago and put some new contracts on the system.

Gerrit

> At 11:11 PM 2/17/99 , you wrote:
> >In a message dated 2/17/99 6:17:40 AM Central Standard Time,
> >warlord@xxxxxxxxxxxxxxxxxxxx writes:
> ><< Nah, support Cantor Fritzgerald Futures Exchange products
> > when it is finally online, (it trading system is not up yet and
> > the CBOT are patting themselves on the back too early).
> > Accelerate the move to electronic and you won't find this
> > kind of shit anymore. All the big money will there. >>
> >Let me get this right, you think that if we trade electronically on the CFFE
> >that there will be more liquid markets, at least over time.
> 
> Nope, just that those humans trying to outdo present day 
> network technology isn't going to work anymore.
> Once upon a time, a human chess grandmaster could be 
> beat a stupid computer program. Not anymore.
> Once upon a time, cracking DES tooks centuries.
> Not anymore.
> 
> >The most liquid markets in the world are right in the trading pits of the
> >Chicago Exchanges.  Despite all the talk about electronic trading putting open
> >out cry out of business, the liquidity of the Chicago Futures markets is still
> >the best in the world.
> 
> And the DTB Bunds are pork bellies right?
> Electronic isn't fully implemented yet in the States. 
> Apparently, according to a report in Euromoney, most of the younger 
> financials pit traders on the CBOT favour electronic trading. 
> Just that they aren't full seat members like the creaky old grains traders.
> Also surveyed were the larger trading houses who favour electronic. 
> I betcha most MFA members favour electronic. 
> 
> >Yes, markets get wild.  Fear and greed exist in the pit and outside of it.
> >Screen trading would be no different if traders could simply walk away or turn
> >off their machines.
> 
> Pit traders do that too. When things get too hot, they just hang around
> with their 
> hands in the pocket and get entertain by the prices gaping up and down. 
> What about declaring order imbalances by a market maker?
> 
> >Efficient order entry and order management software will aid liquidity growth
> >in all markets.  In the short term, it is more likely that we will be seeing
> >technology augment something that works well already (open outcry) rather than
> >it replace it outright.  
> 
> For contracts where there is outright dominance by a single exchange, the
> shift will be slower. In the case of contracts under competition, the change
> will be dramatic. The drama with LIFFE is proof. 
> 
> In the case of contracts under competition with regulatory differences,
> this will 
> be new arena where electronic trading system will win out. In Asia, it will be 
> SFE vs SIMEX pretty soon. SFE wants to list some crummy multi country asian 
> stock indices. When that don't work out, its time to do some raiding.
> 
> Or even before that the Cantor could damage CBOT enought to spook it.
> Cantor needs to get their screen up and across. Its slow cos it had to fight
> political battles given CBOT lobbying against it.
> 
> >While you call for a revolution against open outcry, I see an evolution to
> >technologically enhanced open out cry is much more likely and palatable.
> 
> To some yankees yes. But you guys drive on the wrong side of the road. :-)
> The US still use inches, feet, miles and 1/32s. Time will show. Electronic
> stock exchanges 
> have long shown they can handle multiplicity of counters and volume. And
> once upon 
> a time, they were floor based.
> 
> >Regards,
> >John J. Lothian
> >Disclosure: Futures trading involves financial risk, lots of it!
> >Disclosure: John J. Lothian is the President of the Electronic Trading
> >Division of The Price Futures Group, Inc., an Introducing Broker.
> 
>