you see what you say above? that is the way i look at 500 to 250 to 50 yea somethings are better only because electronic order entry was going to mow over the pits no matter what. but the exchanges didn't do it to help traders out, they did it because they had to. one day you will be trading micros saying what the fuck happened...
Ooh. Well I heard from my cousin's best friend's dentist's brother's friend Ferris that cme let's members substitute human flatulence for nat gas delivery
The SP used to be "open outcry pit" (before the electronic ES)... but it was discontinued because it costs LESS overall to trade electronically. The pit continued to trade concurrently through early growth of the ES, but volume dropped off more and more to the point the pit-traded contract was abandoned. The costs of trading are fees, spreads, commissions, and slippage*. The biggest cost in the pit was slippage. While the other costs increased (or seemed to), slippage was waaaay reduced in the ES... so the "bottom line overall costs" are less in the consolidated electronic market. * to make a pit trade, you'd have to call your broker... who would then call "his guy" outside the pit, who would hand-signal your trade to the broker's rep inside the pit.. .who would conduct the trade. All of that took time... and that time was slippage. The electronic ES eliminated all of that at the cost of the .25pt spread + exchange fees. (Actually, a comparatively good deal)
i agree it looks that way - but the cme found out a way to keep that slippage when they need it. just like in the pit days "fast market" electronic trading you gonna get slipped - it's built in. the cme is not the only exchange doing this either - the only market not doing this ironically is altcoins. ----- so in summation you make the data when you place a trade with your money then the exchanges sell you that data back and throttle it to their advantage, lovely world.
at the worst, 1) a client calls their broker in some office somewhere 2) broker faxes order to desk on cme floor 3) clerk/runner (not the brightest) wakes up and walks order to pit desk 4) pit desk signals order to filling broker clerk 5) filling broker clerk tells filling broker if order is marketable else puts order in deck (a physical paper order book that is held by the clerk in jacket pocket over multiple days if gtc) 6) if order is marketable filler trades with pit trader; usually the top step guy next to him. 7) trading cards filled 8) clerks match cards sp pit was dead a decade before it was shutdown. covid nailed it. buy the bid sell the offer; can't lose
not to mention you paid 40 bucks to do that. i traded copper back in the day you got your fills maybe the next day if you were lucky.