More stupidity perpetuated by those still gaming and corrupting the trading exchange rules and regulations and conditions for participation. While ICE surely knows that poaching business from other exchanges almost never works out, I give them kudos for sticking it to the man. The notion that reduced hours will help volume is vulgar. If grain price valuations are seriously misaligned due to thin volume, it seems to me that represents an opportunity. Since that thin volume is many hours away from the formal settlement time, those "misalignments" do no harm to the marketplace. Indeed, if those "misalignments" are maintained through the entire Chicago pit hours timeframe, then what was once thought of as a "misalignment" would actually be the discovery of fair value. Such a steaming crock of shit.
While I believe my profitability may slightly increase due to the midday pause I do still think it is a mistake on the part of the exchange. The CME states their primary responsibility is for hedgers so I am not sure how closing the market during the morning is helping anyone who wants to hedge a position. On a side note I always get a kick out of people bitching on twitter when Soybeans get 20 ticks taken out on about 4000 contracts blaming HFT. If anyone thinks HFTers are the ones placing 2000+ lot market orders they are a little confused on how the game works. No one would disagree if you said computers have improved every aspect of our lives. Some reason people think the financial markets have to be the one exception though. That makes sense... No one would say "because there are cyber attacks we need to get ride of the internet." However because once in a while there is an issue that can be attributed to HFT we should get ride of that... I personally see HFT as the best example of capitalism and free markets out there. Firms are starting up and going out of business all the time because it is so competitive. Just like when multiple airlines serve the same route prices go down the more players you have in the market the better they will be.
Quote from this article above: âIt certainly creates a little more excitement for the markets,â Mark Schultz, the chief market analyst at Northstar Commodity Investment Co., said by telephone from Minneapolis. âFarmers have mentioned they have a hard time getting motivated to trade when itâs continuously moving.â I thought farmers were hedgers. Why do they need "excitement"? are they hedgers or gamblers? But then the same article quotes the National Grain & Feed Association and a "grain merchandiser' who both feel reduced hours affects risk management/hedging negatively. The article is fully of contradictory positions by the participants. Personally, to avoid all this confusion and blatant bias, the CME should put ALL electronic markets on a 24 hour schedule identical to the current schedules for Gold & Crude Oil i.e. 5pm CT to 4:15 CT