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I am a floor trader in the futures pits in Chicago. I believe that most
trading will migrate to electronic platforms because the feedback is so much
faster and because the costs are so much lower ( fewer clerical and
keypunching personnel). I hope that the exchanges wake up and move to
modernize the pits and become as close to electonic as possible because to
lose the floor population entirely poses certain risks that are not always
fully appreciated in good times. No all electronic market has had to
withstand a real crisis or panic. These thing happen with some frequency even
though the past decade has been very benign. A floor population will provide
a bid and offer even in a panicky market ( maybe not a very attractive one)
and that is a valuable feature to a trader. We all get a little taste of this
problem in a positve way in nasdaq stocks that surge 20,30, or 40 dollars in
a day because the otc market makers are afraid to sell into the rally. No one
complains because we like to see markets go up, but, that is a condition of
illiquidity and on the downside it is no fun.
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