How Electronic Trading Is Changing Tomorrow's Trading Floor

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<p>This is what many envision when they think of a trading floor like the <a class= link rel= nofollow target= _blank href= cmegroup.com/company/nymex.html style= font-size: 12.727272033691406px; target= _blank >New York Mercantile Exchange</a> (NYMEX); however, the day-to-day life of a floor trader has changed drastically from the old days as <a class= link rel= nofollow target= _blank href= dictionary.reference.com/browse/electronic+trading?s=t style= font-size: 12.727272033691406px; target= _blank >electronic trading</a> becomes the new norm.</p><p>Jeff Grossman, President of BRG Brokerage Inc., has been working on the floor of NYMEX just about longer than anyone and has seen first-hand how the exchange has gone from a roaring trading floor, to what is now just a small band of traders who are losing their voice to electronic trading. Grossman weighed in with IBTimes TV&#39;s Jessica Menton about his experience over the last three decades working on the NYMEX trading floor.</p><p>What began as the <a class= link rel= nofollow target= _blank href= marketswiki.com/mwiki/Butter_and_Cheese_Exchange_of_New_York target= _blank >Butter and Cheese Exchange in 1872</a> evolved to the New York Mercantile Exchange in 1882: the world&#39;s largest physical commodity futures exchange and a preeminent forum for energy and metals trading.</p><p>NYMEX once held a virtual monopoly on commodity trading, but in the early 2000s the electronically based exchanges, such as the <a class= link rel= nofollow target= _blank href= theice.com/homepage.jhtml target= _blank >Intercontinental Exchange, Inc.</a> (ICE), started taking away the business of the open outcry markets.</p><p>Although executives at NYMEX felt that electronic trading was the only way to keep the exchange competitive, most open outcry traders were against it because it threatened their jobs.</p><p>In 2006, NYMEX teamed up with the Chicago Mercantile Exchange to use the <a class= link rel= nofollow target= _blank href= cmegroup.com/globex/ target= _blank >CME Globex electronic trading platform</a>, which made CME the exclusive electronic trading services provider for <a class= link rel= nofollow target= _blank href= investor.cmegroup.com/investor-relations/releasedetail.cfm?ReleaseID=192277 target= _blank >NYMEX&#39;s energy futures and options contracts</a> through 2016.</p><p><a class= link rel= nofollow target= _blank href= cmegroup.com/globex/ target= _blank >CME Group Inc</a>. (NASDAQ: CME), which also owns the Chicago Mercantile Exchange and Chicago Board of Trade, acquired NYMEX Holdings, Inc. in 2008.</p><p>Since then, the trading pits have emptied out as mostly computers are now performing the bids.</p><p>Grossman is one of the few traders trying to preserve the open outcry system. </p><p> </p><p> </p>