Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comFirm Insights
Human Financial Traders May Be Going The Way Of The Dinosaur
Author: Dan Brecher
Date: February 16, 2015
Key Contacts
Back
In the age of technology, financial traders are quickly going the way of the dinosaur. Most recently, CME Group Inc., which owns the Chicago Mercantile Exchange and New York Mercantile Exchange, announced that it plans to close most of its trading pits by July 2015. The floor-based S&P 500 futures market, as well as some options on futures, will remain open.
As portrayed by Eddie Murphy and Dan Aykroyd in Trading Places, trading pitswere once jam packed with rowdy financial traders wearing colorful jackets shouting commodities prices and flashing hand signals. “Well, this is it, the last bastion of pure capitalism left on earth,” Aykroyd remarks as they enter the pits.
Today, less than 500 traders and clerks work in CME pits. While some traders were angered by the decision to shutter the pits, the news does not come as a complete shock. Most of the traders on the Chicago Mercantile Exchange and New York Mercantile Exchanges already work remotely using computers, at least part of the time. According to CME, open-outcry volumes have dropped 75 percent since 2008 and now comprise just one percent of its futures volume.
Floor traders aren’t the only positions at risk. As automated trading by computer algorithms becomes more sophisticated and the pace of trading continues to escalate, computers are expected to replace a large segment of financial services workers over the next ten years. In many respects, humans are simply too slow to compete with technology when it comes to global markets that operate around the clock.
Of course, electronic trading is not without risk. In the “Flash Crash” of May 6, 2010, the U.S. equity market lost $800 billion in a matter of five minutes, although it was largely able to recover in 30 minutes. More recently, Facebook Inc.’s initial public offering on the Nasdaq Stock Market was hampered by software glitches. Should robot trading become the new normal, our financial regulations will also need to be updated.
- Business attorney New Jersey
- Business attorney NYC
- NJ attorney Scarinci
- Scarinci Hollenbeck
- Securities attorney NYC
- Locations: Red Bank, NJ, Little Falls, NJ, New York City
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Human Financial Traders May Be Going The Way Of The Dinosaur
Author: Dan Brecher
In the age of technology, financial traders are quickly going the way of the dinosaur. Most recently, CME Group Inc., which owns the Chicago Mercantile Exchange and New York Mercantile Exchange, announced that it plans to close most of its trading pits by July 2015. The floor-based S&P 500 futures market, as well as some options on futures, will remain open.
As portrayed by Eddie Murphy and Dan Aykroyd in Trading Places, trading pitswere once jam packed with rowdy financial traders wearing colorful jackets shouting commodities prices and flashing hand signals. “Well, this is it, the last bastion of pure capitalism left on earth,” Aykroyd remarks as they enter the pits.
Today, less than 500 traders and clerks work in CME pits. While some traders were angered by the decision to shutter the pits, the news does not come as a complete shock. Most of the traders on the Chicago Mercantile Exchange and New York Mercantile Exchanges already work remotely using computers, at least part of the time. According to CME, open-outcry volumes have dropped 75 percent since 2008 and now comprise just one percent of its futures volume.
Floor traders aren’t the only positions at risk. As automated trading by computer algorithms becomes more sophisticated and the pace of trading continues to escalate, computers are expected to replace a large segment of financial services workers over the next ten years. In many respects, humans are simply too slow to compete with technology when it comes to global markets that operate around the clock.
Of course, electronic trading is not without risk. In the “Flash Crash” of May 6, 2010, the U.S. equity market lost $800 billion in a matter of five minutes, although it was largely able to recover in 30 minutes. More recently, Facebook Inc.’s initial public offering on the Nasdaq Stock Market was hampered by software glitches. Should robot trading become the new normal, our financial regulations will also need to be updated.