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[RT] FUTR: CBOT Ag Price Limits



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A copy of a CBOT member letter was dropped on my desk yesterday.  The CBOT is 
looking for some market participant input about potential Ag price limits 
because of the impending Eurex/CBOT electronic trading integration.

It seems there are no price limits built into the Eurex system, according to 
the letter.  Thus, the question is whether to remove the limits, halt trading 
when one month's limit is reached, or increase the limits by 150%, but halt 
trading at the increased limits.

My idea was to hire a couple of programmers to put limits into the system, 
but from the mere existence of the letter, it looks like that is not one of 
the viable alternatives.

I guess my vote would be for no limits.  Though as a broker I like the idea 
of limits, for practical purposes the introduction of options largely negated 
the function of limits. Thus, simplify what already exists and just take the 
limits off.  Any other opinions?

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.