The market didn’t collapse.
And that was a quiet triumph for the Winnipeg Commodity Exchange’s first day of electronic trading on Dec. 20.
A lot of canola spread trading created healthy volumes at the WCE, which now exists only on-line, using the Chicago Board of Trade’s electronic trading program. The old trading floor closed Dec. 17.
“I don’t know what our explanation would have been to our clients (if there had been a trading problem),” said Tony Tryhuk, the manager of RBC Investments, after the market closed Dec. 20.
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In recent weeks the WCE and commodity trading companies tested the new electronic system in simulations, but no one knew if it would work when run for real.
Tryhuk said computerized trades are less forgiving than person-to-person trades, but he and his traders are making the transition well.
“You’re very careful, double checking and triple checking. It slows you down from what you’re used to,” said Tryhuk.
“Right now we’re crawling. In a month we’ll be walking. In six months to a year, we’ll be running.”
Saskatoon-based commodity broker Allan Day of Union Securities said at mid-morning Dec. 20 that trading seemed to be going well.
“We’re holding up quite well,” said Day about canola prices.
“They’re up in line with the Chicago soybean complex.”
Day said trading may increase in coming weeks as traders get used to entering orders on-line, rather than talking to a floor broker.
“I think a lot of traders are nervous about the system right now … but you just put your order in, send go, and away she goes,” said Day.
But not having a floor trader to talk to seems weird.
“It’s always nice to be able to speak to a trader and get a feeling of what’s going on down there,” said Day.
WCE president Mike Gagne said farmers shouldn’t notice any difference in how they access the WCE market.
“If they’re calling a broker today (before the switch to electronic trading) they would continue to do so,” said Gagne.
The WCE’s century-old trading floor, once the symbol of the booming and raucous prairie grain industry but in recent years a quieter place, drew hundreds of traders, former traders and grain industry participants on Dec. 17 to hear the last buzzer, listen to speeches and see the end of an era.
“It was mainly people who had a connection to the floor getting together to talk together there one last time,” said local independent trader John Duvenaud.
The public and media were barred from the event because several exchange staff and traders were losing their jobs with the transition. The event was too emotional to put into the spotlight, Gagne said.
One broker said his company’s floor trader had been so “broken up” by the end of open outcry trading in Winnipeg that he took Dec. 17 off.
Duvenaud, who resolutely opposed the exchange’s move to electronic trading, said he will still use the market, but he won’t execute trades himself. He can’t afford the $700 per month cost of the trading software.
“I’ll still trade in Winnipeg but I’ll do it through a broker,” he said.
