What is the wheat pit like today in the Chicago Board of Trade?
Open Outcry is certainly alive and well at CBOT, and co-exists with Electronic Trading. But CBOT isn’t the only exchange where Open Outcry still exists; The New York Mercantile Exchange, Chicago Mercantile Exchange, Chicago Board of Options Exchange and the London Metals Exchange are just a few examples. These bifurcated markets are curious, as you tend to see asymmetric information across the two groups of traders. Electronic Trading just can’t communicate data as richly as two counterparties facing off against each other, but Electronic Trading arguably can drive far more liquidity than Open Outcry. While it’s well known that Electronic Traders get picked off by pit traders when placing limit orders, Electronic Trading has it’s own set of advantages e.g., execution speed, therefore there are participants who tend to favour one over the other depending upon what their motives are. While there is a lot of literature out there looking at Open Outcry vs. Electronic trading, most of it si
