NYMEX still favoring open - outcry

Quote from mcurto:

Yes, Mike McKenna is filling ALL Goldman orders, while Ardel gets some stuff during roll and CSFB stuff. Mike also does Hardy's stuff when GET is not there, with Tim Farmer (on headset with Hardy) standing next to him and telling him who to take out on the bid or offer. Brian Michael (BMI) still fills a bunch of Fimat stuff and will get Goldman occassionally, along with Man Financial stuff. EDE gets a ton of the JP Morgan and Lehman stuff, and they do a shitload during roll. Savino really is not doing a ton any more, they get a decent amount of option local business, do some UBS Warburg, and some Carr futures biz. ITO did a 20,000 lot outright for RJO Obrien earlier this year and did a great job on it 5 minutes before a 10-year auction. On a daily basis Mike McKenna is still doing anywhere from 2-5,000 contracts, and as much as 20-50,000 during roll on some days, although everyone is pretty much cut down to one or two clerks, with a lot of brokers wearing some headsets themselves now without clerks. Its hanging in there. Can't remember who does the Goldman stuff in five year, but they do all of their curve stuff and roll, including occasional big outright orders. I think that group did about 100,000 (no joke) during roll one day this year (about 40,000 spreads and a 20,000 lot outright), that was fun.
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you've just described what the vaunted electronic matching can't offer: transparency.
 
Quote from aPismoClam:

you've just described what the vaunted electronic matching can't offer: transparency.
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Your point REALLY turns this thread back on topic. What is that energy and grain commercials value most? Transparency!

That's why those pits will survive.
 
Exactly, sorry to get a little off topic, but some guys love to know who is doing what, I worked in the grains for a little while and the ADM's, Bunge, Central Soya/Produce's of the world loved to know who was doing what. What is the big paper in the crush doing? What are the commercials in soybean oil doing? Where are the funds positioned? In grains, more of a local midwest market, don't think the screen would be as liquid and transparent, while the energies, a worldwide market, might be able to scrounge up enough liquidity across the globe. Perfect example, compare CBOT wheat futures to LIFFE wheat futures, actually there is no comparison to the transparency and liquidity of pit traded grains (granted they are different grades of wheat) versus the screen. On the other hand, IPE Brent Oil is just as liquid as NYMEX oil, or almost there.
 
i work in a market that is considered a lay-up for going electronic and transparency is no less valuable to the biggest players there as well.

they think algorithms can just take over, and, in theory, that's true. But what will happen when the algorithms penny each other and mask their size and everything else?

I'm not much of a sci-fi fan but in college I read an Asimov story about a robot in a spaceship that was caught in an orbit and couldn't get out for some goofy reason -- the result of an unforseen consequence in an algorithm.

The unintended consequences will probably kill many opportunities and I have a hunch that they may create some of the volatile-backlash type.
 
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