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Tony: I don't think the floors are going to close up. I want to preface that by saying that I don't believe that pit-style trading will cease to exist anytime soon. It's really a matter of how the leadership plays it right now. In my opinion, it was crunch time at the CBOT to make decisions regarding what they were going to do with their own Electronic Technology Project A, which is growing very rapidly after hours. It's a very lucrative business. To bring the camel's nose under the tent and have them trade side by side during the day was politically unfeasible as recently as three to four months ago. When I spoke on this topic a month ago in an interview with Steven Strahler of Crains Chicago Business, I said that if the CBOT makes a decision to put the Project A alongside of daytime trading, they could begin to coexist. If a critical mass gets on the screen, then the pits will have less importance. The reason this is all happening at the CBOT and the Merc is because they have not embraced technology like the CBOE. The CBOE already has electronic order routing to and from the pits. Therefore, that floor will not close as quickly, by a wide margin. |
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Neal: In a futures pit, when there are four prices at the same time in the same pit, like the S&P 100, an order seems to come in, and for some reason, those guys in the middle just never get a piece of it. A friend of mine from New York had a tough time breaking into the pit. He got so disgusted that now he trades at night, and no one cares who he is anymore. He doesn't have a chance to shmooz with the brokers or need to. I think the guys that have been trading at that level are worried. Could we really get buried when the markets outside see all of these magic numbers showing up and CNBC says, ''It looks like a hell of a day!" |
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Tony: Practically speaking, the way it happens on the screen is that Ma and Pa Kettle hit a button and decide they want to put in a bunch of buy orders because they see a crossover on a technical point. There's either going to be a contraorder in the mar- |
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