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>1) Globex has been around for years. The E-Mini contracts
>have been a tremendous success and volume is increasing
>dramatically. Just a few days ago the Mini SP00 had
>single-session volume in excess of 100k. Obtaining a Globex
>trading terminal is relatively straightforward and the
>expense is comparatively nominal; a simple application plus
>$1500 fee, $25k in trading capital, and circa $400/mo for
>the terminal lease. Why haven't more S&P traders explored
>this option?
Why should they, they got their broker relationships to help
them. You think most of them will survive trading from behind
a screen? Go down to the pit and find out what pit trading is
about.
>2) Obviously, NASDAQ is an 100% electronic. Until recently,
>Level II fees were $50/mo. Similarly, until recently,
>exchange fees for RT CME and CBOT data, were $50/mo and
>$55/mo, respectively. Yet, over the last couple of years,
>there have been dozens of complaints about the latter yet
>virtually none concerning Level II fees. Why? Along the same
>line, traders are paying under $10 (some as low as $4.95) to
>trade the E-Mini while the lowest ticket charge I've seen
>for NASDAQ trades is $14.95. Again, why does there seem to
>be a disproportionate number of complaints? Further, after
>having seen some fills in certain NASDAQ stocks (e.g. QCOM),
>I'm left wondering why there are so few complaints about
>NASDAQ fills.
Sense of impotence to change anything against the will of
vest interest of the market makers. Emini people are
fresh and don't have that attitude, yet. So keep screwing
with the fills, and people will just say, it comes with
the territory. Just like with pits.
>3) What, precisely, do advocates of 100% electronic
>exchanges believe a totally electronic exchange will
>accomplish? For example, do they believe an electronic
>exchange will set them up with a terminal (or the ability to
>connect directly via the internet), provide RT quotes and
>execution capability, and charge nothing more than nominal
>exchange fees =without= becoming members? Is anyone aware of
>an existing electronic exchange (or one in the planning
>stage) that operates (or will operate) in this manner? Do
>they believe electronic exchanges will completely eliminate
>the perceived abuses that occur in open outcry? How? I've
>gotten the distinct impression that certain traders equate
>electronic exchanges with more opportunities for profit. How
>will these opportunities arise? Does anyone believe there
>will be parity between 1-lot and 20-lot traders in an
>electronic environment (or between marginally capitalized
>and well capitalized traders)?
You got to pay for the terminal or at least line charges. I was surprise
to read that Germans don't charge membership fees! Way to go.
First in first out order matching is universal in all electronic exchanges
around the whole world. Most of the world's main board stock exchanges
are electronic.
>4) There seems to be quite a bit of animosity directed
>toward locals. Ostensibly, some traders believe that they're
>being "cheated" and/or the locals shouldn't have the
>"advantage" that they purportedly enjoy. Thus, the "level
>the playing field" mantra. Considering locals endure the
>rigors of trading in the pit on a daily basis and have a
>rather high overhead compared to screen-based traders, how
>is the playing field "un-level"? Considering almost everyone
>who trades, but is =not= a local, has the option to become a
>local (i.e. there are few barriers to entry), why is there
>so much resentment? Conversely, why is there so little
>resentment directed toward NASDAQ MMs (or, for that matter,
>NYSE specialists)? Lastly, considering how difficult it is
>to scalp in the pits as a result of the fierce competition
>between locals, why would anyone attempt to scalp from
>off-the-floor?
Nobody owes the pit local a living or this thing called ""tradition"
of open outcry" further existence. Pit trading now (for a decade \
or so mind) is like living in an Amish community.
All over the world, societies have dumped the market marker with
regards to stock exchanges.
But then, the US tax system is one of the a kind. And this part of the
culture the rest of the world bloody well wants to remain limited to the
US.
>Although I can understand the desire to eliminate the
>"middle-man", I can't quite figure out how to eliminate his
>function =nor= how an electronic exchange, merely by virtue
>of being electronic, would be able to do so. If anyone has
>any thoughts on these issues, I'd love to hear them.
Study the world. American is not the world. The rest of the world
has been largely electronic for more than a bloody decade. You
keep thinking, if it is so in America, it should be any better out
there ...
If it weren't for Echelon ...
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