Thanks Riskless. However, I am not talking about a choice of trading the minis on the screen or on the floor. I am talking about having a choice of starting a trading business with a choice whether to trade an instrument such as emini or bund which could be screen based VS. start your business trading a commodity that is at this point only pit based such as gold or coffee or oil.Why would you pick 1 over the other. Thanks again.
Keep in mind that exchange approval for membership is not a layup. The applications at the CBOT and CME are very background intensive. Bad debt or past legal problems will raise eyebrows. A conviction or bankruptcy are virtual certainties to forfeit approval.
Actually no, my boss on the the Merc was on the membership committee and we discussed this because I had a DUI. They do check everything and are very thorough. There was a guy in our group who was investigated by the FBI because of an old warrant the CBOT investigators discovered. However, as long as your honest about past indiscretions and have positive net worth, you'll be O.K. The net worth thing was important from talking with people from the clearing firm and from meeting with the membeship committee of the CBOT. They specificialy asked about my negative net worth. Fortunately, I was trading for somebody else so it didn't matter. As far as convictions, my boss made it seem like it was no big deal as long as it was mentioned and it wasn't fraud.
I should say that the warrant for the guy was dropped and was bullshit considering it was his girlfriend who tthen became his wife who made the claim. The warrant was very old and obscure.
Trajan, I needn't mean anything as innocuous as a DUI, but IMO with any felony conviction one's toast. I also knew a guy who had a judgement for like 2k (college loan), didn't even know he had it. CBOT membership committee put his app on hold until the debt was settled and proof of payment given. Like you I snuck in with a neg. net worth and they could've been cooler.
A couple of months ago, I spoke with a lady whose prime business is coaching traders who migrate from pit to screen. she charges upwards of 15K/trader for this program. The main points I gathered from the conversation is that futures trading is migrating from pit to screen so pit edge is going away. Looking back at that conversation, there are some things that doesn't sound right... 1. If paper is migrating from pit to screen and locals were making less money due to paper getting thinner, why not go to any of the contracts in Chicago or NY that trade good volume and are not threatened by the elec execution such as oil, grains, softs,etc. I figure it is easier to change commodity than change from pit to screen. 2. I've heard of a good number of traders needing to train to learn how to trade screens.Does this imply that trading the screens are harder than open outcry and as such if one has a choice of trading screens vs. open outcry, one should go to the pit because it is a better positive expectancy game. Thanks
IMHO, it depends on how good your politics are. Do you know any brokers, are you related to anyone in a position that can help you? Floor traders must have good politics to get order flow - which pays the bills and allows you to occasionally speculate. Without good order flow you are just speculating and you may as well be trading from a screen. That is also why many floor traders have a hard time switching pits. They don't have good politics in the new pit. When the pits were growing, a new guy could find a home. But with the pits shrinking - its all about politics. IMHO