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In a message dated 3/14/99 1:18:20 AM Central Standard Time,
kalalex@xxxxxxxxxxxxx writes:
<< I tried to place some stop orders on E-mini SP on Friday.
The response I got from my broker was that he couldn't since that's how it
was with CME.
I wonder if there's any other broker who takes stop orders on mini SP??
I'd like to try a system I'm developing for SP,,,,but S&P's too much and I
want to start slow.
Anyone??
>>
*****The CME had a problem a while back with the stop function of their
computer systems. Essentially, there is a separate server which monitors E-
mini prices on Globex2, then when a price is hit electing the stop, the order
is sent to Globex2 via the TOPS gateway. What had happened was a bad price
had gotten into the stop server and elected a bunch of stops that should not
have been hit. That cost a bunch of FCMs a bunch of money. The CME at that
point said don't use this function until we fix it because we are not held and
we don't know what happened yet.
***** Well, the CME thinks they have the problem fixed, according to my
sources. They have put a function in the stop server to disallow any prices
which are more than 1% away from the last price, according to my sources. That
percentage may change or even be different at this time. What I then heard
was that a prominent FCM with a large electronic business turned the stop
function back on with the CME's OK. There are some off the record reports
that the FCM may have had some of the same problems, but that is third or
fourth hand, so I don't put a lot of weight in it.
****** My FCM is discussing the situation and more than likely what will
happen is some big new disclosure text will be added to electronic trading
account papers to disclose this problem and remove responsibility from the
FCM. Even if the CME has the problem fixed, something else could pop up to
create a similar result, so it is in the best interests of the FCM to disclose
and let the trader make the decision and take responsibility.
***** Currently for my clients I am setting alarms and manually entering stops
on my TOPS desktop terminal. That seems to be working fine for my clients for
the time being.
***** I am sure there are some other brokers turning back on the stops
function already, and I would anticipate more will be soon. The question for
you is, can you put up with another method for stops in the meantime which
might be more dependable.
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 clearing ED&F
Man International, Inc.
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