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Having been burned several times by the Nasdaq system of market makers I know of
what you speak. It is a market maker system that is entirely different then that
on the CBOE or the Pacific coast options exchanges. Many times they won't even
pick up their phones in erratic and volatile markets. There has to be someone on
the other side of a trade and an electron can't buy or sell. With total
electronic trading we will be closer to the old joke then we know. The old joke
is "to who?" You are the market. Ira.
BUBLS@xxxxxxx wrote:
> 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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