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 and Finance
- Securities attorney NYC
- Practices: Corporate Transactions & Business, Financial Services & Regulatory Practice
- 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
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Author: Patrick T. Conlon
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
Author: Bryce S. Robins
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano
Why Secured Transactions Are Important
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher
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.