Despite a widespread movement in the world of stock, options and commodities exchanges to replace floor traders and specialists with computers, that won’t be happening anytime soon with the floor of The Chicago Board of Options Exchange, says William Brodsky, its chairman and chief executive.
Brodsky (pictured at left with U.S. Treasury Secretary Hank Paulson) told the Reuters Exchanges and Trading Summit that the business the exchange does through floor brokers has been stable at about 4 percent in recent years even as total volume has grown.
“It doesn’t mean we’re doing less to automate what we can automate,” he notes.
Brodsky, who says that he expects the exchange to have a physical trading floor “for the foreseeable future,” notes that a special “pit” with 40 or 50 people, most of whom are market makers, accounts for about half of the activity in one of its newest products. Trading in VIX options, which didn’t even exist two years ago, is an example of how ”we’ve married the best of both worlds,” he says.
