Because we like to stay close to our roots, a few of the Attain crew headed down the CME’s trading pits today to show some of the new hires around and catch up with a couple of our contacts. Our gracious guide was the affable Danny Riley of MrTopStep – a commodity futures market commentary blog and chat site for traders. As he told the story of how the pits evolved (which we wrote about during a previous visit), he paused around the Corn Futures and Options pits.

“The options pit is full, the futures pit is not,” he stated in a matter of fact fashion. “Earlier this summer, they tried to get them to switch locations, since the futures pit is bigger, but the old school futures guys refused to switch.”

We can just hear some of the old timers in the Corn pit saying, “I’ve been standing here for 35 years, no options trader is getting my spot.” The electronic trading revolution has all but killed the futures trading pits (only a handful of people in the 30yr bond pit versus the hundreds that were there back in the 90s, for example). But that raises another question in our minds – when will electronic trading deal the futures options pits the same fate?

The options pits – meaning the futures options pits – remain pretty active (and full enough where they are eyeing the rapidly thinning futures pits), mainly because there is a perception that it is easier to do complex option spreads (legs, butterflies, iron condors, credits, debits, etc.) through human interaction than it is on the so called “screen”, as the pit traders call electronic trading.  You may agree with that, until you realize that there are already complex electronic option trading platforms for options on electronic futures out there (such as emini S&P options) and the exchange manages to figure out how to match those trades just fine.

So, it isn’t entirely clear to us why certain option pits continue to see more volume than their ‘screen’ counterparts (maybe the exchange makes more off the pit traded options and has no incentive to move everyone over to the cheaper electronic versions? Or maybe there is a technology barrier yet to be scaled. Either way – Danny, aka Mr. Top Step, seems convinced that it’s an inevitability even for the options pits, believing that as technology continues to advance, the inefficiencies that continue to make the options pits a necessity will likely be eliminated.

So better get your visits to the famed Chicago trading floor in soon. The chance to see the futures pits is already nearly gone, and who knows how long you’ll have the chance for those futures options pits.