It’s the end of an era.
After a 167-year run, the roaring sea of aggressive brokers and traders wearing colourful jackets shouting “buy” and “sell” orders will, for the most part, finally go quiet today.
The CME Group said earlier this year that most of its pits in Chicago and New York would close this summer with the exception of the S&P 500 futures and options on futures pits. By September, the remaining options pits will be located on a single floor in Chicago, the CME said.
The original date for the closure was supposed to be Thursday, July 2. It got delayed until Monday.
One trader on the floor now told us there’s nowhere near as many people in the pit as there were on Thursday. The trader described the atmosphere as kind of a “hungover feeling.”
Chicago was the home to the largest trading pits in the world. Life in the pits was perhaps best captured in the 2010 documentary film “Floored: Into the Pit.”
In 1997, there were close to 10,000 traders on the floor in Chicago. It was physical. It was loud. It was total mayhem.
As one trader in the film put it, “The physicality in the pit was ridiculous. We got to the point where at times the the pit was so physical that before the start of the opening bell we could pick out feet up off the ground and not fall.”
Shortly after the pits hit their peak population, computer trading was introduced. That changed everything.
The pits began to shrink drastically (by about 90%) overtime, the film pointed out. Open-outcry — the form of communication where traders use hand signals to exchange information about buy and sell orders — began to die out.
But even when the exchange switched to an electronic platform, there was still an open-outcry presence. However, with most of the futures being traded electronically these days, the move to close the pits this year didn’t come as a surprise to anyone.
“I think it was a long time coming. [It’s] sad but inevitable day,” one former pit trader from Chicago told us.
Another trader echoed that sentiment: “A longtime coming. They were dead anyway.”
A different trader said the move is also seen as a “passing of the torch.”
** If you were a pit trader or are a pit trader and would like to share your thoughts and experiences, please feel free to send an email to [email protected]