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Strategies & Market Trends : The Final Frontier - Online Remote Trading

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To: TFF who started this subject	9/20/2004 4:16:13 PM
From: TFF	of 12617

IPE silences traders to boost screen dealing By Martin Waller THE International Petroleum Exchange (IPE) will end “open outcry”, or face-to-face trading, in the morning from November 1, to increase the use of computers at the energy futures market. On-screen trading is opposed by most dealers on the floor of the IPE and its gradual imposition has triggered protests. The exchange is also starting a search for four or five new market makers to increase liquidity on the electronic market. There are currently only three. Several big trading firms will be approached to see if they are prepared to fill the role. Open outcry was once the norm on exchanges around the world, but it survives in London only at the IPE and the London Metal Exchange. Dealers in brightly coloured jackets stand on the trading floor to carry out highly charged business transactions. Floor traders say most of trade at the IPE takes place this way and that the screens are unnecessary and have not attracted much volume. But by engaging more market makers the IPE is hoping to encourage more business to migrate to the screens. The exchange agreed in principle in the summer to shift to all-electronic morning trading, promising that the floor would remain open for “a number of years” and guaranteeing a minimum number of hours of trading there. Yesterday the board decided that from 10am to 2pm only electronic trading will take place. Open outcry will start after this and last until 7.30pm, with the screens continuing to work in parallel. Sir Bob Reid, the IPE chairman, said the decision was “another important evolutionary step in the development of the exchange’s business in the electronic market”. Dealing screens were first introduced in 2001. Richard Ward, chief executive, said advances in trading technology were drawing more players into the market “who want to get in and out at the click of a mouse”. This week the exchange saw a record trading day, the IPE said. On Tuesday there were more than 181,000 lots traded in Brent crude, beating the previous record set in February and representing more than 180 million barrels going through the market.

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