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There is an article today on the New York Times online about the CBOT's
rather belated move to electronic trading, and the sometimes less than
enthusiastic response from members. The link to the article is below.
One trader reported that he read in a Chicago newspaper how the CBOT plans
to spend $100 million on electronic trading systems over the next 10 years,
apparently mostly paid for out of higher members fees. The article says
some members don't like the higher fees to pay for the electronic systems.
Also apparently some members view the CBOT spending $182 million in 1997 for
a new trading floor as a significant blunder. Instead they feel the money
should have been spent on electronic trading systems.
The article reports that the all-electronic Eurex is now the largest futures
exchange in the world, taking that place from the CBOT. The CBOT of course
has a significant alliance with Eurex and as I read it the CBOT will
apparently starting electronic trading of Eurex-CBOT products on August 27.
The New York Times article reports that the Eurex trading will eventually
replace Project A, while the CBOT web site says they are taking Project A
members to trade the Eurex-CBOT products. It isn't clear to me from the
CBOT web-site when or if the CBOT, or perhaps CBOT-Eurex, will eventually be
reporting or clearing trades on both the CBOT and Eurex.
There was also an interesting note in the New York Times article about how
CBOT Bond pit trader Thomas Baldwin, who at one time accounted for up to 5%
of CBOT Bond volume, has now become a Nasdaq stock trader. The article
quotes him: "I was standing in the bond pits just wasting my time." "I'm
definitely leaving the bond pits." "I'm trading Nasdaq stocks. I'm
staring at a computer screen right now. This is where it's at now."
The article is free, but you need to register first at:
http://www.nytimes.com
One you have registered, the article link is:
http://www.nytimes.com/library/financial/investing/080600invest-chicago.html
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