Outcry among Liffe traders as Stir pits close

LIFFE, THE London futures exchange yesterday announced plans to close the last of its open outcry futures pits, in effect spelling the end of the armies of colourfully plumaged traders who for 17 years have symbolised the exchange to the outside world.

LIFFE, THE London futures exchange yesterday announced plans to close the last of its open outcry futures pits, in effect spelling the end of the armies of colourfully plumaged traders who for 17 years have symbolised the exchange to the outside world.

The move immediately sparked protests from floor traders who claim that Liffe had rushed the closure of the pits in order to save money and that the case for going fully electronic had yet to be proven in the market place.

Liffe had been running open outcry for the short-term sterling interest rate (Stir) contracts affected, in parallel with trading on its screen-based system, Liffe Connect, and had promised to keep both systems for a transitional period, which most traders believed would extend until next year.

Hugh Freedberg, the Liffe chief executive, yesterday denied there had been a U-turn over that commitment. "We had planned for a transition period of several months....However, the transfer has occurred faster than expected."

Karen Calloway, one of the last of the locals - or self-employed traders - to resist pressure to "go upstairs" and trade on screen, admitted that the move was not unexpected but insisted that liquidity would inevitably suffer.

"Liffe had to force the issue prematurely. The markets are going to be quite exaggerated and treacherous. But at least, finally, we know when the machine is going to be turned off on the patient."

Mr Freedberg said that the closure would save "several hundreds of thousands of pounds a month". Around 50 traders would be affected and around 40 support staff, who will be offered retraining. Some redundancies will, however, be inevitable.