Grain Traders Vocal Over Electronic Trading Hours

Feb 01, 2013

Backlash from Grain Traders Prompts CME to Reconsider Electronic Trading Hours

Grain traders from the Chicago Board of Trade had a chance to voice their opinions about the expansion of electronic hours that changed in June 2012 - in a recent survey issued by CME Group. The response was so overwhelming, with some reports saying over 3,000 responses were received, that CME officials cut the survey response period down by two days.

The frustration began when the Chicago Board of Trade’s parent company CME Group expanded its electronic trading hours from 17 hours to 21 hours. The difficulty with the extended trading hours is that it makes it hard to stay up and watch for 21 hours.

While long trading hours are a problem, it’s only part of the problem. Some traders want CME to bring back the halt in trading following the release of USDA reports. As of right now, traders aren’t given enough time to analyse the numbers and the lack of analysis is forcing grain businesses to make uninformed decisions. Grain traders want CME to consider closing the exchange during USDA crop report releases.

The shift to electronic trading has stolen contracts from the floor, compared to year of year grain pit trading is down 24%. When you see a switch from people trading grains to other products – losing a trade in the grain market means that you also loose liquidly.

Given the overwhelming responses from the survey, CME released a statement saying that it would cut back electronic trading hours. However, it’s uncertain yet if they will revert back to 17 hour days or not.

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