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May 16, 2008 6:52 pm US/Central
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End Of An Era For Chicago Mercantile Exchange
Floor Traders Moving To Board Of Trade Effective Monday
CHICAGO (CBS) ―
The Chicago Mercantile Exchange marked a milestone in its 110-year history Friday as the last floor traders wrapped up business at the building that has served as the Merc's home since 1983.
For 25 years, fortunes and have been won and lost in the trading pits, as traders and brokers dealt in feeder and live cattle and pork bellies. It has been the last bastion of so called, "open outcry" trading, complete with hand and finger gestures and anxious frowns.
Starting Monday, all open-outcry trading of the CME Group Inc.-owned Merc will take place five blocks away in the ornate Chicago Board of Trade building.
The move is a result of CME's $11.9 billion acquisition of the Board of Trade last year, which combined operations of the two longtime rival exchanges.
CME Executive Chairman Terry Duffy said that while there was nostalgia in evidence on the last trading day in the building, the move signifies great new opportunities for the world's largest financial exchange company.
"Emotions may be mixed, but the good news is it's hard to be completely upset when you know you have a whole new venue waiting for you on Monday," said Duffy. He was a trader in the hog market from the first day of trading at the building in November 1983 until becoming chairman in 2002.
Several hundred traders, clerks and others were involved in the last phase of the move across the downtown Loop. The pork belly and livestock trading pits were among the last to be shut down for the transfer.
More than 80 percent of trading now is done electronically, but floor trading remains an integral part of operations.
"Open outcry in a side-by-side environment has a better chance of staying around for some time, because its more cost efficient," said CME Group Vice Chairman Charlie Carey.
Duffy said CME is committed to floor trading for as long as its customers are.
"We'll let the customer make the decision on how they want the execution (of trades) done," he said. "Many people have tried to predict the demise of the trading floor over the years, and each and every one has been wrong."
The twin-towered Merc building, located on South Wacker Drive, will continue to house CME's administrative offices.
CME recently sold the cavernous trading floors to Tishman Speyer Properties LP, which intends to convert them to office space.
Oil company BP is expected to move 1,000 or more employees to the building from the western suburbs.
CBS 2's Mike Parker and the Associated Press contributed to this report.
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)
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