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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.
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