Wall Street & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Trading Technology

00:00 AM
Robert Sales
Robert Sales
Connect Directly

Open Outcry On the Outs in Chicago?

The Chicago exchanges discuss the eradication of the open outcry trading.

The future of open outcry trading at the Chicago Board of Trade (CBOT) and Chicago Mercantile Exchange (CME) is once again a hot topic in the Windy City’s futures markets. Over the last two months, the Chicago exchanges have announced major electronic trading initiatives, rekindling speculation that open outcry will go the way of the dinosaur.

While the CBOT recently received the green light from its members to form a technology partnership with Eurex–the German/Swiss derivatives market–the Merc in July launched daytime electronic trading for its flagship Eurodollar contract.

Not surprisingly, among industry observers in Chicago, there is a mix of opinions about the future of open outcry. Michael Manning–a member of the CBOT’s board of directors and the chief operating officer of Chicago-based FCM Rand Financial Services–says that he does not expect the Eurex partnership to expedite the elimination of open outcry at the CBOT.

That said, he says it would be "foolish" to think that open outcry will always be around. "I would say that there is some limit to open outcry’s life span, but I couldn’t tell whether it’s two years or five years," Manning says.

On the other hand, Les Rosenthal, a managing partner at the Rosenthal-Collins Group expects that open outcry trading will "eventually prevail" over electronic trading. "I’m starting to be impressed by the ability of open outcry, at least in Chicago, to turn back all sorts of electronic challengers," says Rosenthal.

Register for Wall Street & Technology Newsletters
Exclusive: Inside the GETCO Execution Services Trading Floor
Exclusive: Inside the GETCO Execution Services Trading Floor
Advanced Trading takes you on an exclusive tour of the New York trading floor of GETCO Execution Services, the solutions arm of GETCO.