Mechanizing the Merc: The Chicago Mercantile Exchange and the Rise of High-Frequency Trading

This article investigates one important strand in the evolution of today’s high-frequency trading or HFT (the fast, automated trading of large numbers of financial securities). That strand is the history of the automation of trading on what has become the world’s most prominent futures exchange, the Chicago Mercantile Exchange or Merc. The process of the automation of the Merc was episodic, often driven by responses to perceived external threats, and involved both “local” politics and transnational considerations. The article discusses the relationship between the Merc’s automation and the embodied, deeply social trading practices of the Merc’s open-outcry trading pits, and compares how the Merc was mechanized with the quite different—and in a sense more explicitly “social”—project of automation launched by the Merc’s rival, the Chicago Board of Trade.

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