Turn Out the Lights, the Party’s Over(streetwiseprofessor.com)
streetwiseprofessor.com
Turn Out the Lights, the Party’s Over
http://streetwiseprofessor.com/?p=9124
54 comments
> I would guess that when an industry gets as disrupted as pit trading was, then the center of gravity would tend to move. In this case, Chicago did well to hang onto it.
Absolutely. At the beginning of 1997, the London International Financial Futures and Options Exchange (LIFFE) had 65% of the market for trading German Government Bond futures (known in the market at Bunds), its most-traded product. Eurex (the German futures exchange in Frankfurt) had the other 35% of the market. Throughout 1997, Eurex slowly grew its market share by slashing trading fees and extending access to its electronic platform to clients in the US and London. By contrast, LIFFE was slow to embrace technology, preferring to rely on the traditional, open outcry trading floor model. However, in January 1998, for the first time, Eurex captured a larger share of the Bund market than LIFFE. This marked a tipping point and by the end of 1998, virtually all Bund trading had shifted to Eurex (and stayed there).
Coincidentally, the Streetwise Professor himself wrote a paper on the topic: http://www.bauer.uh.edu/spirrong/dtbtip2.pdf
Absolutely. At the beginning of 1997, the London International Financial Futures and Options Exchange (LIFFE) had 65% of the market for trading German Government Bond futures (known in the market at Bunds), its most-traded product. Eurex (the German futures exchange in Frankfurt) had the other 35% of the market. Throughout 1997, Eurex slowly grew its market share by slashing trading fees and extending access to its electronic platform to clients in the US and London. By contrast, LIFFE was slow to embrace technology, preferring to rely on the traditional, open outcry trading floor model. However, in January 1998, for the first time, Eurex captured a larger share of the Bund market than LIFFE. This marked a tipping point and by the end of 1998, virtually all Bund trading had shifted to Eurex (and stayed there).
Coincidentally, the Streetwise Professor himself wrote a paper on the topic: http://www.bauer.uh.edu/spirrong/dtbtip2.pdf
> machines don't hold clients trades while they jump infront of them.
Does machine trading actually bring anything with it that discourages that? I would think that it would make it easier to do that as a defacto business model.
Does machine trading actually bring anything with it that discourages that? I would think that it would make it easier to do that as a defacto business model.
Yes - if you put multiple queues into your software, that's pretty easy to spot and prove in court. It's a bit harder to prove if the queue lives in your broker's head.
No, it just looks different now. (It looks like spending crazy amounts of money on a wired connection to be 4ms ahead of the other guy.)
Well, it's illegal, and presumably it's harder to cover up a machine doing it (since it's in the source code) than a human who could just deny doing anything wrong.
Immutable activity logging.
> the markets are better off in almost every way
In which ways are they not better off?
In which ways are they not better off?
Back in the mid-90s I did tech work for a Chicago financial trading firm. I ended up with one of those colorful coats so I could go down to the trading floor and swear at our computers there. (Tech note: there is still no good swear-over-IP protocol; some things apparently you have to do in person.)
It was an amazing place, and I hope somebody collects all the colorful stories that result when you get so many adrenaline junkies together in one place. (E.g., the time somebody punched out a polar bear. Or the the trash bags full of money. Or the snow futures market.) But my guess is that the traders don't really mourn its loss as much as I will. When I was back in Chicago a couple years ago, the Merc had shut down their trading floor at 30 S. Wacker. I stopped in to ask the security guards if the traders missed it. "Those guys? Hah! No, they just left one day and never came back."
It was an amazing place, and I hope somebody collects all the colorful stories that result when you get so many adrenaline junkies together in one place. (E.g., the time somebody punched out a polar bear. Or the the trash bags full of money. Or the snow futures market.) But my guess is that the traders don't really mourn its loss as much as I will. When I was back in Chicago a couple years ago, the Merc had shut down their trading floor at 30 S. Wacker. I stopped in to ask the security guards if the traders missed it. "Those guys? Hah! No, they just left one day and never came back."
I would LOVE if you wrote up a few stories, however long! Do you think you could?
There's an interesting commentary on this over at the FT:
http://ftalphaville.ft.com/2015/02/05/2113091/reminiscences-... (login needed)
The problem with the abstracted version of the market is that, well, none of the potential repercussions for breaking the rules involve any sort of face-to-face experience. Just the same way that defrauding people via email is much easier than doing it face-to-face, the lack of a physical interchange creates a similar bad behaviour incentive in the market.
With no social-pressure to be collaborative, everyone in it for themselves and regulators inevitably asleep at the wheel, because, well, there’s no way for them to keep up with how bad behaviours are innovating, all we end up with is a Wild West market in which nobody can ever trust anyone. Whether that leads to social stability and growth in the long run, we guess only time will tell?
http://ftalphaville.ft.com/2015/02/05/2113091/reminiscences-... (login needed)
The problem with the abstracted version of the market is that, well, none of the potential repercussions for breaking the rules involve any sort of face-to-face experience. Just the same way that defrauding people via email is much easier than doing it face-to-face, the lack of a physical interchange creates a similar bad behaviour incentive in the market.
With no social-pressure to be collaborative, everyone in it for themselves and regulators inevitably asleep at the wheel, because, well, there’s no way for them to keep up with how bad behaviours are innovating, all we end up with is a Wild West market in which nobody can ever trust anyone. Whether that leads to social stability and growth in the long run, we guess only time will tell?
This excerpt seems to lack perspective. What email scam has taken people for over a dozen billion dollars[1]? And that's just a single example.
The OP article also seems to be highly colored nostalgia. Really, a "market" with numerous "rules not written in any book that you adhered to, or else" is believed to be a paragon of efficient markets?
I do believe it was a party in there, just not one that anyone but the most well connected and capitalized had any access to.
[1] http://en.wikipedia.org/wiki/Bernard_Madoff
The OP article also seems to be highly colored nostalgia. Really, a "market" with numerous "rules not written in any book that you adhered to, or else" is believed to be a paragon of efficient markets?
I do believe it was a party in there, just not one that anyone but the most well connected and capitalized had any access to.
[1] http://en.wikipedia.org/wiki/Bernard_Madoff
I think the point is not that email makes scamming more efficient or effective, which seems to be what you're disputing, but that because it's not face to face, it's easier for someone to cross the line and be a scammer, since there's no immediate face to face social feedback to discourage it.
The same thing happens when someone in car screams and swears at someone for not driving up to expectations, or not getting out of the crosswalk in a timely manner. That same screamer would never do that at work, because of immediate social pressure if nothing else.
Distance and darkness does less to inhibit unchecked corruption than regular social feedback.
The same thing happens when someone in car screams and swears at someone for not driving up to expectations, or not getting out of the crosswalk in a timely manner. That same screamer would never do that at work, because of immediate social pressure if nothing else.
Distance and darkness does less to inhibit unchecked corruption than regular social feedback.
I think this is a fair point, and it may be one that is really difficult to grasp now in 2015. But, after 20 years of not doing business face-to-face, what effect will that have on the trustworthiness of transactions when it becomes the norm?
I'm neither doomsaying nor cheerleading, but it's something worth watching.
I'm neither doomsaying nor cheerleading, but it's something worth watching.
To be a scammer means that you have successfully scammed people. Just sending out bogus emails is not a scam, you need to successfully extract money or some other object from a real person.
Face to face contact is a powerful tool for a scammer, it is a much more personal interaction, and as has been noted, is something that the wannabe email scammer lacks. Projecting confidence at another human and being able to read and respond to their responses in real-time is pretty much the basis for the entire cottage industry of con-men. Email is very impersonal and is easily ignored.
Face to face contact is a powerful tool for a scammer, it is a much more personal interaction, and as has been noted, is something that the wannabe email scammer lacks. Projecting confidence at another human and being able to read and respond to their responses in real-time is pretty much the basis for the entire cottage industry of con-men. Email is very impersonal and is easily ignored.
I do believe it was a party in there, just not one that anyone but the most well connected and capitalized had any access to.
Except it was the exact opposite of that. The archetypal Chicago futures pit trader was a normal guy off the street, usually without a college degree, who managed to scrape together a few thousand dollars to cover the margin for a couple of contracts.
Except it was the exact opposite of that. The archetypal Chicago futures pit trader was a normal guy off the street, usually without a college degree, who managed to scrape together a few thousand dollars to cover the margin for a couple of contracts.
[deleted]
Were/are pit traders primarily trading their own money? My impression is that they were/are essentially hired guns for the big money on the other end of the phone.
In the pit you have a mixture of brokers (near the outside) who are working orders for financial institutions and other clients, and prop traders (a.k.a. "locals") who are trading their own money.
[deleted]
coughs I'm not sure what time zone you're in, but my folks have been scammed like this since tulips were a thing.
Lute Strings. Earlier than tulips.
http://en.wikipedia.org/wiki/Time_Will_Pronounce#The_convert...
https://www.youtube.com/watch?v=BUlsI_Ze5Z0
My first job was as a messenger in Liverpool's shipping and forwarding business. Bills of Lading, Letters of Credit, quotes on seafreight and bulking up the sailor's wage run (five large chaps in a Jaguar delivering £50k in cash, half Sterling, half DMs, to the ship's bursar to pay the crew of the charter cargo ship).
I used to walk past the Liverpool Echo building with printing works in the basement (you could blag an early edition if you asked nicely at the back entrance, and the ink would still be drying).
All gone. Shame as those jobs gave entry to the world of business with little in the way of credentialism.
Sea-freight charges are a time sensitive market. There was a geezer with a tiny office high in a big old seafront office building who had 5 phones on his desk and who would buy empty space on ships then sell it on. No intellectual, tonnes of knowledge of the ships, routes and the people who needed to shift stuff.
http://en.wikipedia.org/wiki/Time_Will_Pronounce#The_convert...
https://www.youtube.com/watch?v=BUlsI_Ze5Z0
My first job was as a messenger in Liverpool's shipping and forwarding business. Bills of Lading, Letters of Credit, quotes on seafreight and bulking up the sailor's wage run (five large chaps in a Jaguar delivering £50k in cash, half Sterling, half DMs, to the ship's bursar to pay the crew of the charter cargo ship).
I used to walk past the Liverpool Echo building with printing works in the basement (you could blag an early edition if you asked nicely at the back entrance, and the ink would still be drying).
All gone. Shame as those jobs gave entry to the world of business with little in the way of credentialism.
Sea-freight charges are a time sensitive market. There was a geezer with a tiny office high in a big old seafront office building who had 5 phones on his desk and who would buy empty space on ships then sell it on. No intellectual, tonnes of knowledge of the ships, routes and the people who needed to shift stuff.
Right, people have been scamming each other face-to-face since history has been recorded (uh, slavery?). The claim that email makes scamming, on the level we've historically seen, easier is laughable. It's text on an LCD screen. Most spam doesn't even get to my eyes and on the rare occasion that it does, it goes straight to the trash bin.
Scamming face to face is a slow, risky process. Email allows me to try to scam millions or even billions in a moment. For essentially no incremental cost. So even if I get a hundredth of a percent conversion on the scam, I win. It also allows me to scam for vastly lower stakes. I'm not going to risk a face to face scam for a penny, or even a dollar. But via email, there's no real floor on how high the stakes are before it becomes unattractive. Said another way, if I send 100 million scam emails, and I convert 1/10th of 1% for a dime, that's $10,000 for little effort, investment or risk (because, really, who's going to hunt you down over a dime).
> The claim that email makes scamming, on the level we've historically seen, easier is laughable.
Right or wrong, the assertion seems to be not that email makes the scam itself easier, but that it lessens the social impact on the scammer (making it easier to decide to be a scammer, and ignore the impact you are having on the other person).
Right or wrong, the assertion seems to be not that email makes the scam itself easier, but that it lessens the social impact on the scammer (making it easier to decide to be a scammer, and ignore the impact you are having on the other person).
Sure, but if the scammer doesn't have an environment within which s/he can exist, s/he won't be around for long.
I am cool with the content of your messages in this thread, but you should be aware that many of us come from linguistic backgrounds with more complicated nomnitive reference sets than (he || she).
You have me really curious. What's the connection between scamming and slavery?
Getting someone to work for you for their entire life for essentially no pay but subsistence?
> What's the connection between scamming and slavery?
...asked the taxpayer.
Slaves didn't get paid. I'll rephrase that. They were taxed 100%.
How much percent are you taxed? Does that make you a slave? You probably think it doesn't.
But if someone that is taxed 100% is a slave, then if we tax people 99% can we say they're not slaves any longer? What about 98%? What about 39.1%? What's the cutoff?
Indeed it gets to a point where we can't say with a straight face that people are "slaves" because they're getting most of their money back.
The difference between scam and slavery is a matter of degree. If you dial this scam up to 100% it becomes slavery. If you dial it down enough that people believe you're stealing their money for their own good, that's when it's a scam.
Food for thought.
...asked the taxpayer.
Slaves didn't get paid. I'll rephrase that. They were taxed 100%.
How much percent are you taxed? Does that make you a slave? You probably think it doesn't.
But if someone that is taxed 100% is a slave, then if we tax people 99% can we say they're not slaves any longer? What about 98%? What about 39.1%? What's the cutoff?
Indeed it gets to a point where we can't say with a straight face that people are "slaves" because they're getting most of their money back.
The difference between scam and slavery is a matter of degree. If you dial this scam up to 100% it becomes slavery. If you dial it down enough that people believe you're stealing their money for their own good, that's when it's a scam.
Food for thought.
You might want to take a couple seconds to think about all the ways that taxation is different from actual slavery, and how clueless and asinine your comments look in light of that.
Taxation doesn't control who you can marry. Taxation doesn't confiscate your children. Taxation doesn't prevent you from practicing your religion. Taxation doesn't require you to take the name of the person who owns you. Taxation doesn't deliberately keep you ignorant and uneducated. Taxation doesn't beat you to death if you try to escape (it is trivially easy to renounce your US citizenship). Taxation doesn't tell you are less than a human because of your national origin. Taxation doesn't make you owned by one person, a thing that can be sold to another person.
Get some freaking perspective.
Taxation doesn't control who you can marry. Taxation doesn't confiscate your children. Taxation doesn't prevent you from practicing your religion. Taxation doesn't require you to take the name of the person who owns you. Taxation doesn't deliberately keep you ignorant and uneducated. Taxation doesn't beat you to death if you try to escape (it is trivially easy to renounce your US citizenship). Taxation doesn't tell you are less than a human because of your national origin. Taxation doesn't make you owned by one person, a thing that can be sold to another person.
Get some freaking perspective.
I hope your use of adjectives has calmed down your nerves.
> You might want to take a couple seconds to think about all the ways that taxation is different from actual slavery
I've thought and read about this for more than a couple of seconds, but if it makes you feel edgy to make unfounded statements about how much research your interlocutor has put into what he has said, then whatever floats your boat.
> Taxation doesn't control who you can marry.
Tell that to gay people in the US.
> Taxation doesn't confiscate your children.
Tell that to those whose children have been unfairly taken away by CPS (there was a terrifying experience related on HN not long ago).
> Taxation doesn't prevent you from practicing your religion.
Religion is bigotry justified and made immune to criticism via holy books. I'm against them so I don't care about this point.
> Taxation doesn't require you to take the name of the person who owns you.
It does require you to get official papers, documents, and IDs registered with the oppressor, plus a passport and all your fingerprints to go from one tax farm to another.
> Taxation doesn't deliberately keep you ignorant and uneducated.
It sure does with the Prussian education model we use in the US, and you're anecdotal proof of that.
> Taxation doesn't beat you to death if you try to escape (it is trivially easy to renounce your US citizenship)
From Wikipedia: Renunciation of U.S. citizenship was free until July 2010, at which time a fee of $450 was established.[29] An increase to $2,350, effective September 12, 2014, was justified as "reflective of the true cost" of processing.[30]
So it's only "trivially easy" for those that have $2,350 in the bank which if you look at the statistics for the US isn't that many people.
> Taxation doesn't tell you are less than a human because of your national origin.
Tell that to the Palestinians.
> Taxation doesn't make you owned by one person, a thing that can be sold to another person.
Tell that to the Greeks whose work and life savings are being negotiated to be sold to international banksters as we speak.
Good try though. Try again. This time try doing doing it better.
> You might want to take a couple seconds to think about all the ways that taxation is different from actual slavery
I've thought and read about this for more than a couple of seconds, but if it makes you feel edgy to make unfounded statements about how much research your interlocutor has put into what he has said, then whatever floats your boat.
> Taxation doesn't control who you can marry.
Tell that to gay people in the US.
> Taxation doesn't confiscate your children.
Tell that to those whose children have been unfairly taken away by CPS (there was a terrifying experience related on HN not long ago).
> Taxation doesn't prevent you from practicing your religion.
Religion is bigotry justified and made immune to criticism via holy books. I'm against them so I don't care about this point.
> Taxation doesn't require you to take the name of the person who owns you.
It does require you to get official papers, documents, and IDs registered with the oppressor, plus a passport and all your fingerprints to go from one tax farm to another.
> Taxation doesn't deliberately keep you ignorant and uneducated.
It sure does with the Prussian education model we use in the US, and you're anecdotal proof of that.
> Taxation doesn't beat you to death if you try to escape (it is trivially easy to renounce your US citizenship)
From Wikipedia: Renunciation of U.S. citizenship was free until July 2010, at which time a fee of $450 was established.[29] An increase to $2,350, effective September 12, 2014, was justified as "reflective of the true cost" of processing.[30]
So it's only "trivially easy" for those that have $2,350 in the bank which if you look at the statistics for the US isn't that many people.
> Taxation doesn't tell you are less than a human because of your national origin.
Tell that to the Palestinians.
> Taxation doesn't make you owned by one person, a thing that can be sold to another person.
Tell that to the Greeks whose work and life savings are being negotiated to be sold to international banksters as we speak.
Good try though. Try again. This time try doing doing it better.
>Tell that to gay people in the US.
Not taxes.
>CPS
Not taxes.
>documents
You have to tell them what your name is. This is not the same as them telling you what your name is.
>education
Taxes pay for that but it's optional.
>Renunciation of U.S. citizenship
If you're poor then you pretty much don't pay taxes anyway.
>Tell that to the Palestinians.
Sorry, let me clear my throat. TAXes, not TANks.
>Tell that to the Greeks
This is a complicated situation, but it's mostly repercussions of government spending without enough taxes to back it up. If anything it shows a way to screw up not taxing.
>Try again.
Yeah, you too. After you look up what taxes are.
Not taxes.
>CPS
Not taxes.
>documents
You have to tell them what your name is. This is not the same as them telling you what your name is.
>education
Taxes pay for that but it's optional.
>Renunciation of U.S. citizenship
If you're poor then you pretty much don't pay taxes anyway.
>Tell that to the Palestinians.
Sorry, let me clear my throat. TAXes, not TANks.
>Tell that to the Greeks
This is a complicated situation, but it's mostly repercussions of government spending without enough taxes to back it up. If anything it shows a way to screw up not taxing.
>Try again.
Yeah, you too. After you look up what taxes are.
When you say "not taxes" you're overlooking that it is through paying taxes that you acknowledge that you will abide by your State's laws.
That is why I say that it is taxes that, for instance, disallow a woman to marry another woman. Marriage (through the State) is a tax-discount. People only want to get married for the tax discount. When the State doesn't let gay people marry, it doesn't let them get a tax discount. If there were no taxes, there would be no difference between married and unmarried, and this point would be moot. I understand this is a long-shot argument but I do honestly see it this way - to me marrying without the State is just moving in together and anyone, gay or not, can do that. What gays want is the tax discount that the State is unfairly allocating only to straight couples. Through taxation, therefore, the State can encourage and discourage behavior. So yes, it is taxes that are keeping gay people from getting a tax discount. I hope this is now clear.
Paying taxes for public schooling is not optional. I don't understand why you would say that when you know you're lying. Maybe you mean it's optional to go to a public school? That is irrelevant. It is not optional to pay taxes for public education.
Regarding name, your parent tell the State what your name is, and from this point on it is the State that tells you what your name is according to your parents. You don't get to pick it. You don't tell the State, your parents do. They do because they are forced to. They are forced to because the State wants to collect taxes from the parents' newborn. If the State did not want to collect taxes from people it would not force parents to name their children with the State.
Also a bigger points I should have made earlier: maybe you should look up what slavery is. Because it has nothing to do with controlling who you marry, confiscating children, not allowing to practice religion, requiring one to change one's name, keeping one ignorant and uneducated nor discriminating against place of birth.
Slavery: the state of being a slave. Slave: a person who is the legal property of another and is forced to obey them.
Are you forced to pay taxes? Yes.
Remember, I never argued taxes = slavery. I argue taxes = scam and if you dial taxes up to 100% that scam becomes slavery. So slavery is the end of the tax scam spectrum.
That is why I say that it is taxes that, for instance, disallow a woman to marry another woman. Marriage (through the State) is a tax-discount. People only want to get married for the tax discount. When the State doesn't let gay people marry, it doesn't let them get a tax discount. If there were no taxes, there would be no difference between married and unmarried, and this point would be moot. I understand this is a long-shot argument but I do honestly see it this way - to me marrying without the State is just moving in together and anyone, gay or not, can do that. What gays want is the tax discount that the State is unfairly allocating only to straight couples. Through taxation, therefore, the State can encourage and discourage behavior. So yes, it is taxes that are keeping gay people from getting a tax discount. I hope this is now clear.
Paying taxes for public schooling is not optional. I don't understand why you would say that when you know you're lying. Maybe you mean it's optional to go to a public school? That is irrelevant. It is not optional to pay taxes for public education.
Regarding name, your parent tell the State what your name is, and from this point on it is the State that tells you what your name is according to your parents. You don't get to pick it. You don't tell the State, your parents do. They do because they are forced to. They are forced to because the State wants to collect taxes from the parents' newborn. If the State did not want to collect taxes from people it would not force parents to name their children with the State.
Also a bigger points I should have made earlier: maybe you should look up what slavery is. Because it has nothing to do with controlling who you marry, confiscating children, not allowing to practice religion, requiring one to change one's name, keeping one ignorant and uneducated nor discriminating against place of birth.
Slavery: the state of being a slave. Slave: a person who is the legal property of another and is forced to obey them.
Are you forced to pay taxes? Yes.
Remember, I never argued taxes = slavery. I argue taxes = scam and if you dial taxes up to 100% that scam becomes slavery. So slavery is the end of the tax scam spectrum.
>When you say "not taxes" you're overlooking that it is through paying taxes that you acknowledge that you will abide by your State's laws.
Not really. The 'monopoly on force' thing is a lot more important than taxes.
>People only want to get married for the tax discount.
Ha.
>Maybe you mean it's optional to go to a public school? That is irrelevant.
That's what I meant. You were talking about "deliberately keeping people ignorant and uneducated". That's about going, not paying.
>the State that tells you what your name is according to your parents.
All you have to do is fill out a form to change it. The state forces that there be a name, but no further.
Being forced to do anything at all does not logically imply slavery.
Slavery is far beyond having a 100% income tax.
Not really. The 'monopoly on force' thing is a lot more important than taxes.
>People only want to get married for the tax discount.
Ha.
>Maybe you mean it's optional to go to a public school? That is irrelevant.
That's what I meant. You were talking about "deliberately keeping people ignorant and uneducated". That's about going, not paying.
>the State that tells you what your name is according to your parents.
All you have to do is fill out a form to change it. The state forces that there be a name, but no further.
Being forced to do anything at all does not logically imply slavery.
Slavery is far beyond having a 100% income tax.
"taxed 100%"
This is just not the case. Slavery is much worse, because it extends beyond money. For instance, as a slave, your children can be sold away from you. There is a big difference between high tax rates and being outright owned.
This is just not the case. Slavery is much worse, because it extends beyond money. For instance, as a slave, your children can be sold away from you. There is a big difference between high tax rates and being outright owned.
You mean how the government can take your children away from you through Child Protection Services?
But that's a detail. Governments do sell our children away quite literally, which is why young people entering the market now pay for health benefits for the elderly - because the State is too incompetent to properly manage the money those elders put in themselves when they were working.
Try another argument. Good one though.
But that's a detail. Governments do sell our children away quite literally, which is why young people entering the market now pay for health benefits for the elderly - because the State is too incompetent to properly manage the money those elders put in themselves when they were working.
Try another argument. Good one though.
I'm trying to parse your second paragraph.
You are saying that governments "literally" sell our children. The reason you give is that young people are paying taxes that support Medicare, i.e., health care for senior citizens?
I think your argument is that these taxes (1.45%, currently) are "literally" the equivalent of slavery?
You are saying that governments "literally" sell our children. The reason you give is that young people are paying taxes that support Medicare, i.e., health care for senior citizens?
I think your argument is that these taxes (1.45%, currently) are "literally" the equivalent of slavery?
Thanks for asking for clarification. I did not phrase that well.
I'm arguing that when we (taxpayers in the US) go in debt ($18 trillion + $100 trillion in unfunded liabilities) that means we are borrowing from future generations which will then be forced to pay for something they never voted for.
I see you like numbers. The numbers I point out above are a little scarier than your "1.45%" but nice try.
I'm arguing that when we (taxpayers in the US) go in debt ($18 trillion + $100 trillion in unfunded liabilities) that means we are borrowing from future generations which will then be forced to pay for something they never voted for.
I see you like numbers. The numbers I point out above are a little scarier than your "1.45%" but nice try.
[deleted]
Next, the NYSE floor will close. It may take a few more years, because NYSE management views it as a useful tourist attraction and publicity operation.[1] But Dow Jones announced a few months ago that they will no longer run pictures of the trading floor. Even the webcam feed seems to have been shut down. There are still people going there, but they're mostly using computers, not live trading. It's more of a big co-working space now.
http://www.crainsnewyork.com/article/20140602/FINANCE/306019...
http://www.crainsnewyork.com/article/20140602/FINANCE/306019...
"The Party" is the Chicago Mercantile Exchange's trading floor -- for futures. Options trade will continue.
Except for the S&P 500 pit which is still pretty active.
Also mentioned in the lede, though yes, I omitted that.
My first real programming job was at the Chicago Board of Trade in 1999, just when the electronic trading initiatives were really taking off. But the floor was still totally packed, totally crazy, and completely inscrutable (to me).
I'm glad I had the chance to see it.
I'm glad I had the chance to see it.
Great article. Writing has been on the wall for awhile, but sad nonetheless that open outcry is going away.
Quick question, for ES futures, SPX options and other major option series that are operating on a hybrid model (electronic + open outcry?) How do the exchanges reconcile these?
For instance, do open outcry trades have to follow NBBO; and what is the latency of an open outcry trade/bid/ask being broadcasted in quote feeds? Do people mostly still do open outcry to execute extremely large block orders? Finally, would the cease of open outcry affect membership pricing of CME?
Quick question, for ES futures, SPX options and other major option series that are operating on a hybrid model (electronic + open outcry?) How do the exchanges reconcile these?
For instance, do open outcry trades have to follow NBBO; and what is the latency of an open outcry trade/bid/ask being broadcasted in quote feeds? Do people mostly still do open outcry to execute extremely large block orders? Finally, would the cease of open outcry affect membership pricing of CME?
You are trying to fit the futures markets into the US equities model. Open outcry and Globex are two separate markets. Open outcry quotes don't show up on Globex. Traders in the pits have handheld devices that allow them view quotes and place orders on Globex.
My understanding is that open outcry is still useful for options trading because it lets you do complex multi-legged trades "atomically." A broker can get together with a local (or several, if it's a big order), and sort out a single price for a trade that will involve multiple instruments.
My understanding is that open outcry is still useful for options trading because it lets you do complex multi-legged trades "atomically." A broker can get together with a local (or several, if it's a big order), and sort out a single price for a trade that will involve multiple instruments.
Thanks appreciate it! So sounds like then Globex and Open outcry are separate markets then although they are closely correlate as they trade the same asset but aren't obligated to reroute orders.
As for options, AFAIK, CBOE and ICE already keep multi-legged books in electronic trading. For example, you can request for a multi-leg order via Interactive Brokers and it'll return a bid/ask spread that's the sum of all your ratio's/legs. When you execute, I think IB's SmartRouter does the magic to figure out which exchange to submit your order to (whether to submit it all to a multi-leg book or as single orders; but IB is on the hook to guarantee the complete execution of your order).
On liquid options, hitting mid on your multi-leg has a decent chance of being executed. However options in general are not as liquid as equity, so happy that guys at CBOE/CME can still do open outcry.
As for options, AFAIK, CBOE and ICE already keep multi-legged books in electronic trading. For example, you can request for a multi-leg order via Interactive Brokers and it'll return a bid/ask spread that's the sum of all your ratio's/legs. When you execute, I think IB's SmartRouter does the magic to figure out which exchange to submit your order to (whether to submit it all to a multi-leg book or as single orders; but IB is on the hook to guarantee the complete execution of your order).
On liquid options, hitting mid on your multi-leg has a decent chance of being executed. However options in general are not as liquid as equity, so happy that guys at CBOE/CME can still do open outcry.
I will always remember them fondly. There was no more visceral way to witness actual change in the markets manifested in physical stress and volume. It was going to happen, sure, but I will miss them.
LME is still keeping its trading pit for now. Had a tour round is, interesting if you get the chance.
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Off topic: wow is that text-on-background unreadable...
http://www.amazon.com/Dark-Pools-Machine-Traders-Rigging/dp/...
Good riddance, the markets are better off in almost every way but removing pit traders.
To paraphrase Churchill. "“Computerized trade matching is the worst form of trading, except for all the others.”
To the city of Chicago's credit. Even thought they lost pit trading for futures and almost all options, they've still managed to keep the bulk of those trades via the electronic CBOE and being the center of HFT.
I would guess that when an industry gets as disrupted as pit trading was, then the center of gravity would tend to move. In this case, Chicago did well to hang onto it.