From the February 01, 2008 issue of Futures Magazine • Subscribe!

ICE Futures U.S. goes electronic

The trading floor where Dan Akroyd and Eddie Murphy’s fictional characters cornered the frozen concentrated orange juice market in the movie “Trading Places” will shut down and make way for all electronic trading as of Feb. 29. ICE subsidiary ICE Futures U.S.’s (the former New York Board of Trade) board of directors voted in December to end open-outcry trading at the end of February.

The decision was based in part on the growth in electronic trading volumes, according to an ICE spokesperson. “We had been consulting extensively with the commercial and trading communities [and] with electronic trading volumes in the 80% range for several months, it became clear that transitioning to fully electronic markets was in the best interest of the markets,” she says.

The futures contracts that will transition to fully electronic markets include coffee, cocoa, cotton, orange juice, sugar, equity indexes and currencies.

The trading floor will remain open for options on the former Nybot’s benchmark softs contracts.

The move occurs around the same time CME Group will be combining the trading floors of the Chicago Mercantile Exchange and Chicago Board of Trade at the CBOT building, a move expected to extend the life of open outcry in Chicago.

Andy Nybo, senior analyst at Tabb Group, says maintaining dual trading facilities would have been illogical for ICE. “Once the majority of trading in a particular instrument is executed electronically then it makes little sense to maintain dual trading facilities. The infrastructure necessary to support voice trading becomes prohibitively expensive and in some instances the dual structure can fragment liquidity,” he says.

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