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felixty@xxxxxxxxxxx wrote:
> The only justification left for open outcry is for the floor traders to
> make a living off the public specifically the off floor trader wannabees,a
> few hundred dollars with no risk a day is nice way to make a livingfor the
> floortraders, you know. Also lesser fill disputes potential as in real
> time live computer trading,what you see is what you get. Also these so
> called disputes...guess whose side the exchnages or arbitration commitees
> will side
> on/sympathetic and waste everybody's time. Open outcry leave holes for
> floor people to steal no wonder they be figthing tooth and nail against
> full computer trading to the bitter end (last minute) and yes they are not
> there for charity either.
>
> Let's hope someday we'll all be computer based. whether for the local
> exchange only or integrated exchanges worldwide...maybe...just maybe...the
> little guy (whatever his trading/analyzing "religion maybe..") may finally
> get a chance....
>
> Just my opinion...
Dear.....
I wasn't going to say anything on this topic until I read your post.
Obviously, you have not spent much time on a trading floor. There is a human
emotional dynamic present on a live trading floor that lends itself
considerably to the liquidity of the market place. Making a living by trading
for oneself on an exchange floor is not a license to steal, as you implied. It
is a very hard way to make a living. I was a market maker on the CBOE for 12
years. During one year, 1/3 of the members turned over, i.e.
1/3 were replaced due mostly to people going bust. Now keep in mind that an
exchange membership
is a considerable investment, most are about $500,000 and up. Then there are
the member dues, depending on the exchange, $1,000 - $3,000 per quarter.
Bottom line, the floor trader needs to make
$100,000 per year just to cover the cost of being a member and basic living
expenses. They stand there
with no desk, no cushy chair, no computer, while being on an adrenaline edge,
screaming their brains out, and fellow traders, spitting in their face,
stepping on their feet, jabbing them in the ribs, seven hours per day. I do
not begrudge them one penny for whatever money they make in accordance with
the rules. Then provide a valuable service in TAKING THE OTHER SIDE OF YOUR
TRADES.
Yes, there are some abuses. But, those are a function of the exchanges
either not having sufficient rules or not enforcing the rules they have. These
abuses are not under the purview of the debate on human interactive trading
at a centralized market place vs. trading via a sterilized computer
environment. If and when the exchanges eliminate the floor traders, you will
miss them dearly when there is no one there to take the other side of your
trade. I predict, that if they do eliminate floor traders, the system will
evolve into people shouting bids and offers into their computer, so we will be
basically back to the same system, except that the member traders will
actually get a "seat" for a half of a million dollars.
Exchangingly,
Norman
P.S. I still call my orders in on the telephone. I prefer interacting with a
human voice on the end.
CFM # 166
>
>
> Mervin Yeung wrote:
>
> > Dear Jim & RTs,
> >
> > Do you know which Exchanges in the world are open outcry and which
> > Exchanges on the planet are using computer to do the job? I want to
> > know where I can find the information on this topic. I want to know if
> > computer system is superior to the open outcry. I heard Hong Kong has
> > switched to computer system. However, in America, people in Exchanges
> > prefer to maintain the tradition. Open outcry must have some
> > advantages. Any comments?
> >
> > Thanks in advance!
> >
> > Mervin
> >
> >
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