Final bow for City's oil trading pit
London oil traders famed for stripy blazers and frenzied hand signals took their final bow today as the high-tech era claimed another victim in the City.
The passing of the open outcry oil trading pit comes after London’s International Petroleum Exchange (IPE) announced trading in Brent crude oil futures contracts would go completely electronic from Friday.
About 250 traders linked to the pit are thought to be affected by the move, which comes after nearly 25 years of noisy business.
The closure of the IPE pit will leave the London Metal Exchange as the only commodities pit or ring left in London, although the New York Mercantile Exchange (NYMEX) recently announced plans to open a floor in London after launching an open outcry Brent crude exchange in Dublin last year.
The IPE began the switch from the pit in November when it started trading electronically during its morning session. Plans for the full transition were announced by IPE’s US owner InterContinental Exchange last month as it attempts to fend off competition from rivals such as NYMEX.
Under the open outcry system, orders are taken over the telephone by brokers and transmitted to traders in the relevant pit. All orders must be shouted out with hand signals used to supplement the words.
The London Metal Exchange said it had no current plans to abandon its open outcry system, which is used by 11 dealing firms and supplemented with telephone and electronic trading.
