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John:
Thanks for your replies. You know more about it then I do. I also use PATS
now, and I agree it is quite good. In terms of the whole issue of treatment
of stops we also agree it's quite confusing, I appreciate your input.
--- Original Message -----
From: <I4Lothian@xxxxxxx>
To: <realtraders@xxxxxxxxxxx>
Sent: Friday, January 05, 2001 3:23 PM
Subject: Re: [Fwd: Re:[RT] Market - OEX astro]
> In a message dated 1/5/01 1:01:12 PM Central Standard Time,
> joeduffy@xxxxxxxxx writes:
>
> << John, you are largely arguing the semantics of laguage here, rather
then
> information. My clarified replies are highlighted by the two sandwiched
> =======
>
> My guess is your firm still uses TOPS to execute minis, and hence your
> bias???
>
> I have a question at the end. If you would please provide your input
there.
>
> ***** Joe, we do offer trading via an Internet Platform that uses TOPS.
We
> also offer the Interactive Broker's Trader Workstation. And, we are in
the
> process of offering PATS System. I try very hard not to speak from a
voice
> of self interest. I try very hard not to be biased about these issues.
> Rather, I try to offer my clients a choice of interface or Trading
Platform
> and let them decide for themselves what they want and need. If I can
deliver
> it, great. If not, I will offer them my input into where they might find
> what they are looking for. TOPS, FIX, ETC, a/c/e, Globex2 will change.
> Honesty does not. While there is no thing such as unbiased, I try to be
as
> balanced as I can in representing the alternatives. Fair enough?
>
> =====================================================
> Not mixing at all that I see. The CME FIX API has been designed to allow
> firms and Independent Software Vendors to integrate their order entry and
> routing systems with the CME. FIX API functionality is designed to route
> orders from external order routing systems through the CME's central
Order
> Managers (OMs) to GLOBEX2, CUBS2 and/or TOPS. TOPS is NOT an electronic
> gateway. That is a small part of it AND one the CME is encouraging users
to
> not use for e-trading. TOPS is NOT an e trading platform, and is
tangentally
> involved in the sense your telephone used to be for trading.
> ======================================================================
> ***** OK, the guy who built the gateway between TOPS and Globex always
> refers to this interface as a gateway and so does every help desk I have
> talked to. TOPS routes, through this interface (gateway to him), into
> Globex2 for emini trading. TOPS is a routing system. It is part of the
> equation. You are right about the semantics. Apples and Oranges was not
a
> good example, except in the context of being part of a meal. The Globex2
> host is nothing without routing systems to enter orders into it,
regardless
> if that is GL Win, or TOPS.
>
>
> ===================================================
> Okay, I could have said "sent" instead of called, as a phone is not
> necessary. Other then that its exactly accurate.
> ==================================================
>
> ****** OK, that helps. :-)
>
>
> ==========================================================
> The CME FIX API provides access to both GLOBEX2 and exchange floor
> operations through TOPS and CUBS2. The CME FIX API will replace the Order
> Routing API (ORAPI) and has been designed to overcome the current
> limitations of the ORAPI interface as well as REPLACE the TOPS process
for
> all order flow directed to the GLOBEX2 electronic trading system and the
> CUBS2 electronic broker desk management system.
> =========================================================
>
> ***** This is where you are getting into vaporware. FIX API is not being
> used to connect to CUBS2 or TOPS at present, as I previously wrote. There
is
> no volume through either route. In some ways, the FIX API is still a beta
or
> uncomplete product because of the fact it is not being used for these two
> functions it was intended for. However, the FIX API does not offer the
same
> functionality that TOPS does for order management. When an EC fails at
the
> CBOT, where are orders routed? To a TOPS printer. When a CUBS2 unit
fails
> at the CME, where are the orders routed. To a TOPS printer. Both of
these
> assume the orders where sent through TOPS. Even if the FIX API offered
> connections to the CUBS2 devices, there is no plan that I know of for how
to
> handle orders when the device fails. This is a very messy and risky
process,
> even with TOPS. I would not want to be a floor broker in such cases. I
> wholeheartily agree that TOPS is being used for purposes it was not
intended.
> But, as I have said before and will repeat, I believe TOPS will be around
> for as long as Open Outcry is around. Not my original thought, but I
agree
> with it. The CME seems to agree too, as they have decided to turn TOPS
into
> a cash cow. They also want to influence people to move off of TOPS into
the
> FIX by increasing the cost for TOPS. And they especially want to get the
> CBOT volume off of their part of the system, or make a lot of money
servicing
> it.
>
> ===========================================================
> This discussion was SOLELY about stock index mini trading. And for mini
> trading TOPS is not the best choice.
> ===========================================================
>
> ***** As I stated, I believe that it really depends on the style of
trading
> and value you place on various risks. If I wanted a system that I could
talk
> to one of 100 people to manipulate my order if the Internet Trading
platform
> was down, then I would not choose one of the FIX API systems. In a couple
of
> years, you may have no choice, or there may be greater functionality. The
> Firmsoft product from the CME is a good start, but it is limited. It is
not
> available over the Net yet, only by some dedicated connection to the CME.
> And Firmsoft does not allow the user's access to be limited to specific
> offices within a clearing firm. Thus, I can't use the system directly. I
> would be able to see all of ED&F Man's orders if I could. I don't know
the
> numbers, but I would not be surprised to find more volume being generated
> from TOPS than from FIX for Globex2 trading. Maybe I am wrong, but I
believe
> more retail volume is going over TOPS than FIX into GLOBEX2. I have a
call
> in to check that.
>
> ***** Another factor in all of this is that there are not enough firms
> offering FIX API access to Globex2. One firm I know of, which does
> significant volume, has had some system performance problems and
> capitalization problems as well. Significant moves in the stock market,
at a
> firm with a concentration of stock index traders, could cause a marginally
> capitaized firm have capital problems if their clients where too
successful.
> So there are all sorts of risks to consider when choosing a broker and an
> interface.
>
> ***** As I said above, we will be offering PATS System. It is the best
> looking and functioning system I have seen and has good support and
> capitalization for the ISV. Some of the FCMs offering their own systems
may
> not have the same resources available to them to be able to grow their
> systems properly. This was an issue I considered when choosing this
system.
> Clearly, the exchanges want out of the order routing business, thus the
push
> to move from TOPS. FCMs may well come to the same conclusion and look to
the
> efficiencies of letting ISVs develop systems to use.
>
> =======================================
> Maybe I am confused. I understood there were many OM's that "held" the
STOP
> and MIT orders and then sent them for execution as elected.
> Your saying this is not true?
> =======================================
>
> ****** It depends. TOPS orders go to a CME Order Manager Server, which is
> separate from Globex2. It hold stops, which become "or better" limit
orders
> as set by the FCM. Market orders also are routed to the OM Server from
TOPS
> and become or better orders basis the last price when the order is
received.
> FIX API stops, to my knowledge, are all managed outside of the exchange
> system by the FCMs or ISVs. I don't know the specifics of how these are
> treated and that probably varies from firm to firm. PATS Systems, which
> accesses Globex2 through the FIX API, holds the stops on the user's
computer.
> When the incoming price feed shows a trade at that price, the order is
then
> sent as an unlimited limit order to Globex2. This was not a bad design
when
> it was being used by a bunch of institutional traders with hard wire
> connections. I think there is a better design for traders connected from
the
> Internet. Though, there are some advantages to having them on your own
> machine for quality assurance reasons. You have all the controls and
> measurements for your system, so you can monitor and control the use of
these
> stops at a greater level.
>
> Regards,
>
> John J. Lothian
>
> Disclosure: Futures trading involves financial risk, lots of it! John J.
> Lothian is the President of the Electronic Trading Division of The Price
> Futures Group, Inc., an Introducing Broker.
>
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