Friday, October 24, 2008

For crying out loud 

One of my favorite field trips with students in years past was the trip to the Minneapolis Grain Exchange (perhaps the old Minneapolis Fed was better, perhaps not). The highlight of the trip was to stand on the floor of the exchange and watch traders call out bids and asks for the various commodities traded. It's a live floor. I've had a few students graduate and become traders on the MGEX. But now, in something that one of my students who is interning there called "the end of an era", they'll be trading only from a desk:
After a long history of futures and options open outcry trading, MGEX (Minneapolis Grain Exchange or Exchange) is closing its trading pits effective December 19, 2008. The decision to make the transition to exclusively electronic trading was unanimously approved by the MGEX Board of Directors and is pending MGEX ownership approval.

The Exchange�s electronic trading operations on the CME Globex� electronic trading platform will remain unchanged. MGEX will continue to host the cash market from a newly remodeled location in the historic Grain Exchange Building.
Kayvon Pirestani wrote of the "heaving pits of the [Chicago] Board of Trade had the look, smell, and feel of capitalism in its rawest, purest form." But for speed, accuracy and cost, electronic markets have advantages that most of the world has already embraced. MGEX had been a holdout, though the NYMEX and the Chicago exchanges still have open outcry for the time being. In a down market with cost savings aggressively sought, others may soon follow MGEX to electronic trading.