Old-School Pit Traders Protest Latest Changes By CME Group
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CHICAGO (CBS) — The last vestige of the frenetic trading in the pits of Chicago’s options exchanges could be in jeopardy under a new plan to use electronic trading to set closing prices.
Technology has all but eliminated the need for “open-outcry” trading–the frantic yelling and hand-signaling by traders of the floor of the Chicago Mercantile Exchange, which trades grain futures, and Chicago Board of Trade, which trades livestock.
Most of the daylong trades are done electronically–except for the closing prices, which are set by the traders on the floor.
Dealers say the settlement process has helped preserve the floor, even though electronic trading is faster and cheaper, Reuters reported.
Julie Holzrichter, a managing director at the CME, said it is not fair that settlements should be made only on the basis of pit trades-since so many trades during the day are done electronically.