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Last Updated: Thursday, 7 April, 2005, 20:22 GMT 21:22 UK
Open outcry trading to end on IPE
Open outcry trader on the London IPE
It's all over bar the shouting
Open outcry trading came to an end at London's International Petroleum Exchange (IPE) on Thursday, closing almost 25 years of noisy business.

IPE is switching to a fully electronic system, a move it says will better meet client needs and boost efficiency.

Many traders, who work in multicoloured jackets, shout orders and use hand signals, are unhappy with the move.

They will relocate to a rival exchange in Dublin that is being run by the New York Mercantile Exchange (Nymex).

Come back

Nymex has said that it is committed to bringing open outcry trading back to London because demand is still strong.

It currently is awaiting regulatory approval from the Financial Services Authority, something that is expected to take up to six months.

We will give it a go and if it works, we will continue with our way of life
Lee Vermolen, trader at KCM Energy

Despite the boisterous image of the IPE pit, supporters say it is a very effective way of doing business and point to the fact that trading volumes have been climbing annually.

IPE, and its owner the Intercontinental Exchange (ICE), were unable to comment on the decision because they are planning a share sale and are in a so-called "quiet period".

When ICE took control of IPE one of its conditions were that it would take the exchange fully electronic.

Culture clash?

For some, the end of open outcry trading on the IPE is yet another example of London's financial markets losing their personality, and the little guy getting trampled by the big players.

Compounding this feeling is the fact that should open outcry disappear, then there would be significant job losses among traders and brokers.

For others, the end of an era is nothing more than the inevitable march of progress that ultimately will lead to a more sophisticated market.

Switch to an electronic platform, the argument goes, and there is no longer the need for a physical presence in the IPE, allowing a trader to work in any number of markets from any location.

Instead of just trading Brent crude oil futures in London, why not also cover the FTSE 100 stock index, the metals exchange and US bonds?

On top of that the paper trail is easier for regulators to follow, ensuring a more transparent market.


BBC NEWS: VIDEO AND AUDIO
See the last shouting traders in action



SEE ALSO:
Nymex launches Dublin oil trading
01 Nov 04 |  Business
Oil prices surge to new records
01 Apr 05 |  Business


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