NYBOT-TOMS OUT NO FUTURE FOR FUTURES: PITS TO CLOSE IN 2008 October 22, 2007 -- The New York Board of Trade is planning to officially shut down its futures pits in the next six months as electronic commodities trading takes over, according to sources familiar with the matter. Shutting down the bulk of the trading floor of the Nybot, one of the city's most historic financial institutions, could leave nearly 1,000 people out of work. It could also eventually lead the downtown exchange to abandon its headquarters at the World Financial Center, which is owned by the neighboring New York Mercantile Exchange. Ever since the IntercontinentalExchange, a rapidly growing electronic futures market, paid $1.8 billion for the Nybot in January, traders on the floor have been worried about the pits disappearing. After ICE bought the exchange, it quickly launched electronic trading of the Nybot's main coffee, cocoa and sugar contracts and most of the trading volume moved from the floor to computers, where orders are anonymous and executed faster. Over the summer, ICE removed a fee on electronic trading of Nybot products, which caused even more trading volume to move off the floor. Currently, only 15 percent of the volume in Nybot's key products come from the exchange floor, which was featured in the 1983 film "Trading Places" starring Eddie Murphy. Sources close to the Nybot said ICE executives have recently told some of the exchange's biggest customers that the futures pits would likely be shut down in February. Trading in options on Nybot's key commodities will remain on the exchange floor, sources said. A spokeswoman for ICE said no decision has been made to shut down futures pits and that the Nybot's board of directors would have to approve any such move. But, some of ICE's shareholders have pressured the company to aggressively cut costs at the Nybot and eventually move to all-electronic trading. In April, ICE laid off 60 Nybot employees as part of a cost-cutting measure related to the merger. In July, ICE boss Jeff Sprecher said the floor-trading business was still accretive to the company and there were no plans to shut the futures pits. But since then, more volume has continued to migrate away from the Nybot floor, which was renamed ICE Futures, and several trading firms have either dramatically reduced staff or closed completely. "We continue to expect that the floors' contribution will shrink enough to require closure within the next 12 months," Keefe, Bruyette & Woods analyst said Niamh Alexander in July. The Nybot was created from the June 1998 merger of the Coffee Sugar and Cocoa Exchange, which was founded in 1882, and the New York Cotton Exchange, which started in 1870. http://www.nypost.com/seven/10222007/business/nybot_toms_out.htm