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Chris:
The currencies at the CME has long since seen their peak of popularity. Much
of the institutional business has shifted to the Interbank market, and as you
note, so has some of the retail market. I think the currencies also suffer
from a serious case of stock indexitis. Many traders who were active day
traders and players in the currency markets during the 1980s and early 90s
have moved to the stock index futures for the action there.
In an effort to generate interest in their currency futures, the CME has
offered free real time streaming quotes over the Internet. They have
introduced new 3rd World currency contracts and have even developed e-mini
versions of their more popular contracts.
The formula that spawned a successful e-mini stock index market complex has
largely not worked in the currency futures. They are trying. I would guess
they will continue to try so as not to give up their franchise in this market
sector.
I would expect that the lower volume open outcry contracts will be the first
ones to move exclusively to the Globex2 screens. There will be a time again
when currency trading becomes in vogue with the retail trader. Whether that
will be cash trading or futures, I don't know. As a futures broker, I think
the futures market are a better and safer market for the retail trader to be
in though.
Regards,
John J. Lothian
Disclosure: Futures trading involves financial risk, lots of it! John J.
Lothian is the President of the Electronic Trading Division of The Price
Futures Group, Inc., an Introducing Broker.
In a message dated 12/21/00 7:59:13 PM Central Standard Time,
nchrisc@xxxxxxxxxx writes:
<< John,
Curious if you have any thoughts on the future of CME currencies. Word is
that the volume is withering away. Having recently switched to a internet
cash forex firm, this is easy to see. No way I would ever go back. 24 hour
stops/ 24hour tight spreads... Are you aware of any plan the guys have to
protect their franchise? Based on what I see, it would appear that the
currency world will soon be owned by whomever survives the (inevitable)
consolidation of the cash e-brokers. I have not looked at a currency
futures quote in months.
Chris
>>
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