From HuffPo: A small band of humans is fighting what it warns is the rise
of the machines in financial markets. A
group of two dozen brokers and traders has sued CME Group, the owner of major
commodities exchanges in New York and Chicago, arguing that a new rule that took
effect on Monday would benefit high-frequency traders, favoring machines over
people and putting hundreds of jobs at risk at futures and options exchange the
Chicago Board of Trade.
Under the current trading system, the final prices for
futures contracts for everyday commodities like corn and soybean oil are
negotiated in person, on the floor of the exchanges in an area known as the
"pit." This "outcry market system," as it is known, is
responsible for the noisy, frantic trading environment -- in which brokers and
traders yell and hand-signal buy and sell orders with one another -- that many
still associate with the floors of stock exchanges. Some of the customers that
these traders and brokers work for are farmers looking to hedge the price of
various crops.
The CME's new rule replaces this in-person trading process
with a blended system that takes into account orders placed by computerized
traders when arriving at a final settlement price for these contracts. According to the lawsuit, this change
"will, for all practical purposes, eliminate the open outcry pit based
system..."
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