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I4Lothian@xxxxxxx wrote:
>******* Getting a Globex Electronic Trading Permit is certainly an option.
>But, it is an expensive option. Much of the success of the E-mini has come
>from lowering the entry costs for trading. Lower contract size, free quotes,
>Internet access and low commissions, not to mention one of the most active
>stock markets ever have all been factors. The CBOT has tried to launch the
>CBB and wants $4000 (or something close) to have a direct connection to this
>cash bond trading system. Is not going to work.
Merc's $1,500 app fee (includes terminal installation), $25K T-Bill cap,
and Reuter's style terminal lease ($400/month???) is not pocket change, but
if you do X00's cars/per month, then it's chump change for the value. Plus
much of the cost is subsidized by the CME.
What's really going to kick Globex ETP's into high demand is when the Merc
releases the e-mini Nasdaq 100 (1/5 value of regular contract). Then
you'll see a lot of Level 2 stock junkies coming over to trade the e-mini
Nas100.
>******** Another thing, even if you are a Globex ETP member, you need a
>brokerage firm. Yes, you can go to some clearing firms and get great rates.
>But, this part of the business is very small. I don't know that the clearing
>firms are accurately gauging their risks, or the cost of taking those risks,
>because this is an underdeveloped segment. Volume and competition will help
>answer that.
Use a take it or leave it approach when searching for clearing firms, these
guys want your business. Most brokerage firms now realize that the
e-trading has more limited risk than with regular trading accounts. Just
don't throw your briefcase around when trading :))
>****** This broker guy :-) , is thinking of the competition for order routing
>for the trading floor. The CME is putting a lot of effort into CUBS2.
>Despite the early problems, they could have an outstanding tool before long.
>They plan to deploy 200 CUBS2 terminals by the end of 1999. There is a
>product called Deckmaster that is being tested by some floor brokers. The
>Timber Hill product is another one that is in the running. (Disclosure: My
>operation offers the TH product.) The exchanges have greater resources,
>access and clout than the competition, but this is a developing market ripe
>for some competition.
That's why I said it :)) CUB's is for the 1 lot trader...not a slam, but
not everyone can afford getting an ETP. I plan on doing an end around the
brokers and go directly to the Globex system. It suits my trading needs
better and I'll still have floor access when I need it.
>******* I think you are right about the value of the open outcry and the ET
>markets existing together. That is part of the evolution that is currently
>taking place. However, there open outcry is being electronically augmented
>already. The hand held devices or ones on pedistals, the clerks on headsets
>in the pits and such are all part of it.
Still, pure electronic ala e-mini is preferable due to speed of execution.
I heard and read others that have said if you need execution speed, then
lease a seat and trade in the pit. No thanks!!! :)) Then I'd lose my edge
being an off-floor trader <g> Globex is fast enough for me.
Tony Haas
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