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TO ALL CME GROUP AGRICULTURAL FUTURE
To all CME GROUP AGRICULTURAL Future & OPTION BROKERS:
Remember when Beans in the 'teens meant something?
Has anyone noticed the significant change in open outcry volume in the trading pits in the CBOT AG room? Is it MF GLOBAL? Or have customers lost interest in hedging $1350.00 Beans? Have you noticed the locals looking at the SCREEN for a market? They are not looking at DELTA SHEETS anymore...traders are looking at GLOBEX for their bid & ask markets!
Look at the CME EOS system or the electronic trading platform of choice. Your customers are moving to GLOBEX for trade execution. STF believes that CME STAFF has significantly reduced exchange fees as part of a so-called trader incentive scheme.
CME has dangled the carrot with reduced fees and STF believes some high volume players are even PAID per trade. This allows customers to avoid the desk, back office, clerks and option brokers. AND GET PAID to boot!
The CME group is not supposed to try to get customers to enter orders via OPEN outcry VS. GLOBEX. "Let the customers decide!"
On FEB 15th, 2012, CME GLOBEX shut down the Crude Oil Contract. Staff went to the pit for traders and brokers. Aghast! There were NONE. Staff had to go upstairs and find members to provide liquidity, price discovery...and YES... The Crude Oil was settled in the trading pit that day by HUMANS. CME's reasoning...'technical glitch'.
Next time you don't feel like making a market, filling an order or answering a phone...just hang out a sign...'Technical glitch.'
We need support from options brokers. We need you to reach out to your customers and get some letters of support from all customers!
Save the Floor Staff
P.S THIS WAS SENT OUT Thursday- CME has designed and perfected this 'enhancement' to eliminate brokers and ultimately open outcry.
The CME NYMEX Crude oil flash crash and Algorithms Gone Berserk
User-Defined Spreads: Covereds Execution Enhancement
Effective this Sunday, March 25, 2012 (trade date Monday, March 26), the execution for User-Defined Spreads (UDS):Covereds will be enhanced to better ensure delta neutrality.
Currently, in certain scenarios, the matching process may result in a Covered trade that is under- or over-allocated on the futures fills. Starting Sunday, March 25, 2012, the Covered matching algorithm will track executions of a resting order such that when the executed quantity of a customer's option order results in an accumulated delta futures allocation at or above 0.5, a futures contract is allocated to the next fill.
The enhancement is scheduled for a phased launch as follows:
Sunday, March 25
CME FX Options
Sunday, April 1
CME Equity Options
CBOT Equity Index Options
CBOT Commodity Options
CME Commodity, Industrial Commodity and TRAKRS Options
Sunday, April 15
CME Interest Rate Options
CBOT Interest Rate Options
Green Exchange Options
NYMEX Crude Options
NYMEX Non-Crude Energy Options
We recommend all system providers supporting Covereds test this enhancement thoroughly in New Release. Details on UDS:Covereds functionality are available online.
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