Bryan: In fact the decline is going on since the last roll. Normally, when 250-300k minis are traded (in this is the case for all the time, last week, Monday, Tuesday etc.), this implies for me, that circa 120.000 big spooz change hands (plus/minus 20.000 contracts). However, things changed big time: Yesterdays figures: S&P: 265961 minis traded, 52147 big contracts. NDX: 148226 minis traded, 10982 big ones. Mon - Wed the numbers looked the same way. Last week not so drastic, but trend clearly: IOM pit less. You see what i talk about ??
maybe a few big players are trying to make a statement. i was a commodity broker for 3 years, and we yelled ourselves hoarse screaming at the S&P and Naz pits for borderline criminal slippage. Almost every single day it was BOHICA- bend over, here it comes again. I wouldn't piss on those guys if they were on fire.
Anyway those pits will go down by the beginning of 2003. Greenspan promised me this ! When I hear sometimes the bullshit that some people sell here....
darkhorse, that is exactly what suppose. it will be difficult to get really behind this story, but the point is probably really that some institutionals want less of this stealing and start to move out of the pit. however, the question is where did the volume go. in the minis ? probably yes, at least some part. however, volume in minis did not surge enough to compensate the decline in pit contracts. i was also working for a futures firm (some time ago), and i must say it was strange to deal with the NAZ/SP traders. each single time when we phoned in a MKT order - it was _always_ filled at the worst price at this time. positive slippage never happened - at least i cannot remember. maybe the consequences start diggin' in here now...
plus can u imagine what will happen when single stock futures go big time? all electronic, basically zero data fees, commissions next to nothing, tradable by anyone who has a futures OR stocks account, and much more useful for stock players because they will be stock specific instead of market wide. the index pits are gonna be a ghost town. p.s. you can also see the future for the pits in the quality of the clerks. the pit clerks have gotten worse and worse- there used to be great ones because even though the job sucked and paid jack, it was a ticket to the ATM machine of working on the floor. Now that the floor is basically a dinosaur waiting to die, most of the clerks are high school dropouts. and i love it, i really do. less money for the middleman means more money for the winning traders- the winners pay less to the middlemen and the losers stick around longer too because the middlemen don't kill them off as fast. Milton Friedman described the purpose of competition as a way to reduce profit margins (cost to the consumer) toward an asymptotal line above zero. For the middlemen that's just what is happening.
Let's go completely electronically, stocks futures, Forex, options, you name it. Kick out all those middleman. We will rock better then ever before ....:0)))
I also look forward to the day that we go all electronic but don't think this past week is anything special. End of Q1 '02 along with a holiday just like end of Q4 '01 with a holiday.