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Veteran Contributor

Re: Savethefloor Wants You!

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Veteran Advisor

Re: Savethefloor Wants You!

I've been asked to pass along a veteran floor trader's view on this topic.

 

In his own words: "I love my occupation and hold the real economics and justification for a fair market of world trade and prices to the highest degree. I truly enjoyed my education with farmers at a recent meeting in Monmouth, Illinois. And if anything, I am on their side. I have opened myself up to requests of how I can help and what information I can provide to implement a synergy for all of us. I am working hard here to keep that interest alive as well as the majority of fellow traders and brokers and NOT have a few Bad apples spoil the whole bunch, if you will. I believe wholeheartedly in the makets and continue to work tirelessly to make this a better place. Once again, I open myself up to fair discussion and will continue to work with farmers to provide the fair price discovery they deserve that has made this country what it is..... ! "

 

Mike

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Honored Advisor

Re: Savethefloor Wants You!

Sorry da feeder; I'm in the 20% of their membership that has been excommunicated. You need to give the Cliff notes version. for a few of us

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Veteran Contributor

Re: Savethefloor Wants You!

Mike-

From my experience I have no reason to question the integrity of those working at the pit.  I'm sure they are mostly wonderful people. 

 

My premise is that trade orders that I have had executed are often filled quicker and more accurately through the electronic trade... especially with the options.

 

I mean no disrespect to floor traders.  It is simply a matter of human limitations.

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Senior Advisor

Re: Savethefloor Wants You!

Another example of disdain for farmers, your customers. The floor traders are going to lose their jobs. I wonder how many of them favored an auto bailout to save their jobs. Not so many I would assume because they would think autoworkers were over paid and alimiting factor for business.

 

Yeah farmers beleive in supply/demand but we think it should have some relationship to physical product and the dealing thereof. Unfortunately what we have is casino action in which we are supposed to select a buying or a selling opportunity. Meanwhile volume is the objective as there is money to be made in transactions with little intent for price discovery.

 

Brokers are nothing but paracites trying to profiteer off the action . They don't grow anything. They don't produce anything and they got this snobbish idea that they are somehow superior to those that do.

 

SCRU Yu!   Yeah my spelling is bad.

 

 

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Re: Savethefloor Wants You!

The most accurate description of the electronic trading's shortcomings so far. Price discovery is no longer the main objective of the markets for it's largest users, the high frequency traders. They use predatory algorithms to take advantage of the volume entered by the end users and other less sophisticated market participants. Super computers and co-located servers for the select few who can afford it give them an unfair advantage over everyone else. Behavior that used to bring a floor trader before a disciplinary committee now happens in milliseconds and goes unnoticedand unpunished in the name of volume and revenue. The cme may claim that any extra volatility caused by these programs is just a factor of "the Market" but every extra increment an end user has to pay up or sell down to as a result of short term market manipulation is real money out of their pockets. The more the cme lets this happen the less participants will use the markets and the wider these swings will become.

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Senior Reader

Re: Savethefloor Wants You!

The problem is not with the pit or the pit traders.  The problem is with the CME.  By not stepping in on the MF Global mess and making ALL of the customers whole, immediately, the CME lost all credibility.  They proved, by their actions or lack thereof, that our money is NOT SAFE in their hands.  After protecting their customers, the CME should have been in the lead in prosecuting the MF Global thieves, not being in bed with them.  The trust in the system is gone.  There needs to be a place for price discovery, but I don't think that the CME should be that place.

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Advisor

Re: Savethefloor Wants You!

Exactly the CME lost all intregrity when they failed to backstop the MF Global fiasco, when they have a bundle of cash to do it. As far as electronic its all a sham smoke and mirrors. Read Zero Hedges piece on all this electronic trade going on in all the markets.

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Veteran Advisor

Re: Savethefloor Wants You!

justinbarnes710,

 

Thanks for your level-headed response. I know it's a sticky issue. It seems like we are all better off when we can have a dialogue about a sticky issue vs. screaming and yelling tactics that never seem to accomplish much. I know some real nice, respected, hard-working, and honest traders and folks at the CME Group. I don't agree with the MF Global debacle. It seems like fault can be spread widely there. And it's a shame farmers and others are out their money. Anytime risk is involved, which is the case with grain marketing, the outcome can be uncertain. I hope for the farmer's sake, the futures market remains a risk management tool where that risk can be spread out.

 

Mike

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Advisor

Re: Savethefloor Wants You!

Marketeye,

Other than obvious blame towards MF Global , I think the blame can go right to the top of the CME ., for lack of oversight and not insuring the customer funds. These funds are supposed to be sacred . How can anyone have faith in the entire system.when this was allowed to happpen. Are there more MF Global's out there? What was the CME afraid of.??

 

Not only the funds that were missing was a problem also customers were locked into losing positions they couldn't get  out of. How many want to do that again, pit or electronic. 

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