Friends of the floor fear -- and its computerized rivals hope -- that by the time it reopens, customers will have finally adapted to the new world, as they have in other markets that no longer rely on open outcry to make prices. And every day that the pit remains closed threatens to erode the market share it commands when it reopens. Even Kosanovich and many of his comrades have been handling client trades electronically themselves lately.

100% Electronic
“Nobody was prepared to go to 100% electronic, but the market did it with no problem whatsoever,” said Thomas Fitch, founder and CEO of RVAssets, which supplies trading algorithms for eurodollar and Treasury options.

He disputes the assertions from floor traders that they provide tighter spreads. The two months in which eurodollar options trading has been wholly electronic allow for a near-complete analysis of more than 90% of trade data, Fitch said, and it reveals an average bid-ask spread of 0.26 cent. The average for floor trading is impossible to measure, but was probably 0.30-0.40 cent, he estimates. And traders at the exchange form “an opaque layer of brokerage” that’s able to gather information about flow that a screen doesn’t convey, he said.

“These factors can be used by the market maker to his advantage, and he is willing to pay around 50 cents a lot for this to the floor,” he said.

The closing of the pits has driven adoption of electronic innovations in development for years and investors “can trade any strategy today as easily as they could prior to closure of floor,” Sean Tully, CME’s global head of financial products, said on the company’s earnings call.

Stakeholders in open-outcry dispute that statement. Since the floor closed, illiquidity is particularly acute in weekly options on Treasuries and eurodollars and in long-dated eurodollar structures, said Matthew Carinato, chief operating officer of Trean Group LLC. Carinato said it was likely that some of the options business that used to go to the floor had migrated away from CME’s listed products to the decentralized swaps market.

Complicating matters is the upheaval in U.S. interest rates brought about by the Federal Reserve and other central banks to combat the economic fallout from coronavirus containment measures.

Libor is influenced by the Fed’s main policy rate, which was slashed to a range of 0%-0.25% in March. Forecasters expect it to remain there, possibly for years. That’s unfavorable to traders of a product used to wager on changes. Open interest in both Treasury and eurodollar futures has tumbled since February.

“Under normal conditions, I would expect that most end-users would want the pit back,” Chicago-based futures and options broker Albert Marquez said. “It’s far more efficient and markets are tighter. That being said, it’s not exactly the best time for eurodollar options with rates where they are.”

Regardless, Kosanovich -- aka Magilla -- is itching to return to the last bastion of human price discovery, where age-old rules still apply.