The Evolution of Online Discount Futures Trading

A Brief History

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First, a few key aspects of online discount futures trading:

  • The order entry (front end user interface)
  • The backend connectivity to the exchanges
  • The broker/clearing firm supporting the software
  • The futures markets being traded
  • The electronic exchange where trading takes place.

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In 1998, the e-mini S&P 500 was one of the first markets to be traded electronically. Orders were placed by using a very basic online interface. The CME called this electronic trading platform the Globex. This allowed futures traders and brokers the ability to trade over the internet in real time without having to actually be on the trading floor. Before this electronic revolution, traders were restricted to using only the telephone for entering their orders. The emergence of the electronic exchange forever changed the futures trading industry.

The result was steady increase in volume, which in turn had exchanges, clearing firms and commodity brokers investing in technology and education. Another result of the increased volume was lower commission costs.

In 2003 the SEC came out with the $25,000 day-trading rule (traders must have a minimum equity of $25,000 in their account to day-trade) that sent many stock day-traders into the field of online futures trading (mostly in stock index futures like e-mini S&P 500, e-mini nasdaq, e-mini dow jones, e-mini Russell).

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Discount Futures Trading Today

Today, most of the futures contracts are now traded electronically resulting in the 'open out cry' being largely overshadowed by the electronic futures trading volume. Just recently the Chicago Mercantile Exchange Inc. (CME), the largest futures exchange in the world, announced multiple volume records being reached at the exchange during the Feb. 27 trading session, including total daily volume of 13,719,685 futures and options, of which a record 10,926,638 contracts were traded electronically on Globex, representing 80 percent of the total volume.

Our clients enjoy the ability to trade directly from the charts, place bracket orders, multiple exit strategies, and create automated trading strategies.

We hope to continue being front runners in the field of online trading by providing our clients with some of the best front end connectivity, speed and service.

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