Word: globex
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Dates: during 1992-1992
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Since the system could one day be easily modified to trade stocks, Globex could further obliterate the distinctions between futures and stock exchanges and result in a new world order of financial markets. Says John Sandler, chairman of the Chicago Merc: "We can become a securities exchange. There's nothing to stop us from doing that...
...futures, he calls his broker, who phones the order to the trading desk, which turns it over to floor traders in the pits. They, in turn, haggle over the best price for the order, which is then tallied and recorded. The whole process takes upwards of 20 minutes. With Globex, the floor traders and pits are completely bypassed. Prices are set by a computer match with incoming orders. Execution time: three seconds...
That kind of talk worries officials at the New York Stock Exchange; trading technology is advancing so rapidly that the Big Board could be bypassed by such new high-tech systems as the Arizona Stock Exchange, the NASDAQ and now Globex. The N.Y.S.E. petitioned the Securities and Exchange Commission to slow down, if not unplug, some of the networks. Says William Donaldson, chairman of the N.Y.S.E.: "To our competitors, we're the big monster; and it's fun to zap the monster...
...Fred Shipley, professor of finance at DePaul University: "A computer bug could bring the capital markets to a crashing halt." Last month, for instance, a minor computer failure at the Chicago Board Options Exchange shut down trading for about 90 minutes. Although the Commodity Futures Trading Commission has tested Globex to its satisfaction, it cannot guarantee that the system will be fail-safe. Concedes chairman Wendy Gramm: "We haven't thought of every contingency...
CAPTION: HOW GLOBEX WORKS...