September 20, 2012 / 7:23 PM / 6 years ago

Exclusive: ABN AMRO to shut grain desk on CBOT trading floor

CHICAGO (Reuters) - Brokerage ABN AMRO will close its pit trading grains desk on the floor of the Chicago Board of Trade on November 1, the team’s five members said on Thursday, in one of the clearest signs that the iconic ‘open outcry’ style of trading is drawing to a close.

The head office of ABN AMRO bank is seen in Amsterdam May 29, 2007. REUTERS/Koen van Weel

The exchange, the citadel of the global grains trade, has seen business shift from the trading pits where raucous traders in multi-colored jackets execute trades with hand signals to what is considered the more efficient electronic platform.

The five-person ABN AMRO team, consisting of four phone clerks and one runner, was once the mainstay of the 164-year-old exchange, but its fortunes began to fade with the arrival of financial investors about a decade ago who viewed grains as an alternative asset in their large portfolios.

In August, 96 percent of CBOT agricultural futures contracts were traded electronically, according to exchange data, underscoring how the personal relationships fostered by pit traders had given way to quick-hit electronic trades.

“We’re closing November first,” one of the desk staffers said, declining to be named. “We were busy about five minutes after the open and about 10 minutes before the close but that was about it. The rest of the day there was no business.”

Spokesmen in Chicago and New York for ABN AMRO Clearing, which is owned by the nationalized Dutch bank ABN AMRO ABNNV.UL, declined to comment.

The ABN AMRO desk staff, who asked not to be named, were looking for jobs but said they were not optimistic there would be any openings on the trading floor.

“I’m taking a little time off and we’ll see where I go from here,” one staffer said, in his familiar deep green jacket.

“None of us have lined up anything,” said another staffer.

Many of those on the grains team had been with the company when it was called O’Connor & Co, before it was bought by Fortis Clearing Corp and merged with ABN AMRO.

Edmund and William ‘Billy’ O’Connor who founded the brokerage that carried their name made their fortune trading grains.

“It was O’Connor and Company for 55 years, Fortis bought us in 2006 and the name was changed to ABN AMRO in 2009,” an ABN AMRO employee, who asked not to be named said.

A CBOT trader, who declined to be named, said more firms will likely leave the trading floor.

“You are going to see a lot more of it,” he said

“What do you need a desk on the floor for, if you don’t trade the open or the close? The one reason is for insurance, in case something breaks down on the screen (electronic platform).”

Managers, phone clerks and runners from other trading desks did not want to comment on the record about the closing of the ABN AMRO desk.

“It wouldn’t be good for me to comment on another company or another desk, but yes the ABN AMRO desk is closing. We’re still here and have heard nothing,” a source at a competing company said. “As futures pit trade keeps shrinking, there is simply less need for a floor presence, fewer desks on the floor.”

The ABN AMRO grains floor desk is well known among floor traders and news agencies as a reliable source of market information.

“I’m not so sure the CME is aware of the sociology and the news sharing that takes place on the floor, but everything is going electronically anyway,” a trade source said.

Additional reporting by KT Arasu, Mark Weinraub and Julie Ingwersen in Chicago; editing by John Wallace and Bob Burgdorfer

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