Caitlin Zaloom and the global transition to electronic trading

October 30, 2007
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Caitlin Zaloom’s most recent book, Out of the Pits: Traders and Technology from Chicago to London, has factored into several articles this week about the world-wide transition from open-outcry trading to electronic, computer based trading—a transformation that she argues promises a radical change in the culture of the global marketplace.
Niko Koppel’s piece in the New York Times cites Zaloom’s comparative account of what two very different financial exchanges—the trading floors of Chicago’s commodities markets where open-outcry trading has been a tradition since the mid-nineteenth century, and a shiny new digital dealing room in the City of London—to describe how this transition is affecting the marketplace. Koppel writes for the NYT:

Ms. Zaloom observed that, though pit traders were once the first to see bids and offers, electronic trading has leveled the playing field.
“The screens are anonymous,” she said, “and that’s part of the idea of having a more pure market, one that doesn’t have the complications of flesh and blood.”
Equal access to the markets has made trading more challenging for pit traders. “We’re trading against machines” all over the world, said Jeffrey Levant, 53, who has been at the [Chicago Mercantile] Exchange for 29 years, and recently left the Nasdaq pit to learn electronic trading. “Sometimes it feels like we’re John Henry going up against the steam hammer.”

Zaloom also recently factored into a similar piece in the London Review of Books. The online version is available to subscribers.
Read an excerpt from the book.

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