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
Data Center, Dark Fiber, and Lit Services Agreements in New Jersey: Key Terms and Legal Pitfalls
For New Jersey data center owners and operators, a service agreement may look routine when it is signed. The network is functioning, the vendor is meeting its installation schedule, and the parties have agreed on pricing and performance specifications. The provisions that seem most important at that stage are often the technical ones. That changes […]
Author: George McGowan
Fort Monmouth Redevelopment and the Transformation of Monmouth County Real Estate
The Fort Monmouth redevelopment has entered its execution phase, and it is repositioning the broader Monmouth County real estate market. When Netflix and the Fort Monmouth Economic Revitalization Authority closed on the 292-acre Mega Parcel in December 2025, the transaction did more than hand over a deed. It marked the moment Fort Monmouth stopped being […]
Author: Donald M. Pepe
Local Zoning and Land Use Rules Every New Jersey Rental Property Owner Should Understand
Owning a residential rental property in New Jersey involves more than finding tenants and collecting rent. Property owners must comply with a combination of state laws, municipal ordinances, building and housing codes, and zoning and land use regulations. These requirements can affect everything from the number of dwelling units permitted at a property to whether […]
Author: Donald M. Pepe
Real Estate Litigation Explained: Top 5 Disputes and How to Avoid Them
The five most common real estate disputes are breach of contract claims, landlord-tenant conflicts, zoning and land use disagreements, construction claims, and boundary disputes. Understanding why each arises, and taking preventive steps early, can help property owners, tenants, developers, and investors avoid costly litigation. Key Takeaways: Real estate transactions are complex endeavors involving numerous parties […]
Author: Paul Grossman
When a Child Turns 18: The Gap in Your Family’s Estate Plan
Once a child turns 18, parents lose the automatic legal authority to make medical and financial decisions on their behalf, even if the child still lives at home or remains on the family’s insurance. Three documents close that gap: a durable power of attorney, a health care proxy or directive, and a HIPAA authorization. For […]
Author: George McGowan
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Author: Paul Grossman
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.