Monday, October 29, 2007

Trading Places: Computers Now Rule in Chicago

Open-outcry pit trading (pictured above) traces its roots to 1848, when the Chicago Board of Trade was founded to trade agricultural futures contracts. But computers and electronic trading are rapidly replacing the 159 year-old tradition.

-- With the consolidation of the Chicago Board of Trade and the Chicago Mercantile Exchange, the pork belly pit, formerly emblematic of Chicago's open-outcry commodity trading, will close and begin operating exclusively by computer.

The open-outcry pits of other low-volume markets, including cash dairy products and South American bean futures, are also closing. Many traders believe that all commodity markets will inevitably follow suit.

Since 2000, open-outcry has declined from about 90 percent of the trades at the exchanges to roughly 22 percent.


At 6/24/2010 2:34 PM, Anonymous Ben said...

I think we are still seeing a massive shift away from traditional trading methods with full service brokers losing their market shares to online brokers. Technology and the advances in new trading systems, is definitely helping.


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