OPEN OUTCRY AND ELECTRONIC FINANCIAL TRADING SYSTEMS (A Comparison Study) Wheny Khristianto Dosen Jurusan Administrasi Bisnis-FISIP, Universitas Lampung whenykh@yahoo.com Abstract The impact of the Internet in the financial and accounting fields has created vast electronic marketplaces for the purchase and sale of stock, bonds, and other financial products. With rapid technological advantages, growing trading volume, and an increased demand for a more efficient trading environment, the majority of futures exchanges have introduced various forms of electronic trading. Despite this directive, a few futures exchanges still use open outcry trading. On the other sides, The impact of electronic trading in the future exchange is very significant. This article compares open outcry and electronic trading in the ability to create liquidity, the ability to reduce direct cost, and the ability to make global links. Key words: Internet, open outcry trading, electronic financial trading. Introduction In the globalization era, information technology has a very important role in the trading and business activities. It provides tools for controlling the global corporation- communicating with distributors and suppliers, operating 24 hours a day trading and business activities, coordinating work teams in the global scale, and giving service about reporting needs. Intensive use of information technology in business has caused a new phenomenon in industrial society-the fully digital firm. A digital firm is one where nearly all the organization’s significant business relationship with customers, suppliers, and employees are digitally enabled and mediated [Laudon and Laudon, 2004]. Thus, using Internet in the digital firm can link one organization with other organizations into a single network easily. Beside that, it can also create the foundation for a vast digital marketplace, where an information system links together many buyers and sellers to exchange information, products, services, and payments. The impact of the Internet in the financial and accounting fields has created vast electronic marketplaces for the purchase and sale of stock, bonds, and other financial products. Moreover, not only online trading and management of investment accounts for many kinds of products are available, but also financial systems are developed today on high-speed computer networks. With rapid technological advantages, growing trading volume, and an increased demand for a more efficient trading environment, the majority of futures exchanges have introduced various forms of electronic trading. The trend towards electronic trading dates back to the Commodity Exchange Act of 1974, which govern the U.S futures markets. Despite this directive, a few futures exchanges still use open outcry trading [Bank of Canada Review, 1999]. Under open outcry trading process,