One of the most colourful sights of the City for the past 25 years is to come to end following a decision by the International Petroleum Exchange (IPE) to close its trading pits.
The IPE's gas and oil futures pits, a daily theatre of traders brokering billion-dollar deals face-to-face in brightly coloured blazers, will close on 7 April, when full electronic trading will take over.
"The decision has been taken to maintain and enhance the competitive position of the IPE, as well as to take advantage of the greater acceptance and adoption of electronic trading," a statement from the IPE said yesterday.
The switch to full electronic trading at the exchange has been in progress for the past three years and was a condition of the IPE's takeover by the US IntercontinentalExchange in 2001.
The change has drawn fierce opposition from members and traders of the IPE, many of whom are self-employed and face redundancy when the face-to-face trading, which is known as "open outcry", comes to an end.
The move will also play into the hands of the IPE's rival, the New York Mercantile Exchange (Nymex). It has launched an open outcry pit in Dublin and has vowed to move the pit to London "as quickly as possible".
In a statement yesterday, Nymex said it would accommodate displaced IPE traders. "Our Dublin trading floor will provide a forum for traders to continue to pursue their livelihoods while we build a trading floor in London. We are committed to open outcry trading for both the benefits it provides our customers and for the preservation of jobs for traders and floor personnel," it said.
The IPE has operated an open outcry system since its launch in 1981. There are as many as 270 people on the trading floor at one time. The London Stock Exchange moved to electronic trading in 1986. The London Metals Exchange will soon become the only commodities trading floor in the UK to use open outcry.