New | Floor trading in Chicago, New York commodities says good night as pits close for good
“I liked the energy, I liked the roar,” said Schwartz, 45, as he sat before a bank of six computer screens in an office at DV Trading in Chicago. “There is no more roar.”
When Marc Schwartz heard that many of America’s last trading pits were closing down, the veteran commodities trader was hardly surprised. He spent 17 years yelling in the New York pits before moving to a distant office, along with many of his colleagues.
Still, he felt a blow and a pang of nostalgia when he heard the news.
“I liked the energy, I liked the roar,” said Schwartz, 45, as he sat before a bank of six computer screens in an office at DV Trading in Chicago. “There is no more roar.”
Traders are calling it an “end of an era” after news late Wednesday that CME Group, the parent company of the Chicago Board of Trade and other exchanges, is shutting down most trading in its 21 pits in Chicago and New York. Those sites are where people establish prices by flashing hand signals and shouting at each other on a trading floor.
But that shoulder-to-shoulder tussle is coming to an end with a whimper, not a bang. Futures traders and clerks in CME pits have dwindled to about 475, and many of them work remotely using computers and don’t come to the floor every day.
Blame technology. Floor trading has shrunk to a fraction of its volume from two decades ago as faster, cheaper, computers take over the process of establishing prices on everything from hogs to cattle to Exxon Mobil’s stock. In total, 2.8 billion futures were traded on CME exchanges last year, but nearly all electronically. Only 31 million futures changed hands on trading floors — 1 per cent of the total.