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In spite of the fact that I work for an exchange .. it is
very difficult to defend the MERC on this one. He was
screwed. The early closing on the day the market declined
500 occurred while his orders were already in the pit. His
broker(Refco)was going through a panicked liquidation and
telegraphed their intent to the entire community. By the
time the market reopened the next morning(at a 60% implied
vol)he was DOA before trading even started. In the
securities industry, the kind of practices that are
commonplace in the futures industry, would be felonies.
Refco was, alleged, very sloppy. The only one in the
Chicago marketplace who didn't know what was being traded,
how much and anxious they were to exit would have to have
been someone deaf, dumb and blind. I wonder how any of us
would fell if we had a large short person and he whole world
knew we were coming to cover. Vic was one of the better
traders and he was _ucked royal.....sorry about the
expletive. Lots of individual investor who traded on those
two days were also hurt by the action and there were lots of
trade adjustments made.
If there is a condemnation to be made, IMHO, don't close the
markets prematurely ... let the marketplace work.
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