Pabst, if I were you. Since you already have the skill set for the floor. I would hop a plane to New York. If you do not like NatGas or Crude there are others with huge floor business. Comex has Copper and Gold and Silver. Gold and Silver especially. I would be willing to bet ----if you can make it on Chicago floors----you would make it on the New York floors. The markets in NY are wider than anything comparatively in Chicago. Even the Grain markets are tight. Gold and Silver are all over the place. You would s**t if you saw some of the stuff that goes on in New York.
Indulge me with more info on these permits? Commissions on the Nymex are killing me. One good thing about Interactive Brokers is that you can clear a Nymex Mini for 6 bucks. Try clearing them on TT ----it will kill you. Are these permits like Leases on the Minis? If so, I am interested.
Last time I was in New York, I was in Fishers shop talking with some guys there. He runs the biggest shop in NY and is a good guy. Don't know alot about him personally. But we have a mutual friend and FISH is a great trader and teacher. Rare combination. I would back up what you are observed there. The largest NY traders clear MBF. In fact, in that office, you have some of the largest traders on earth in those particular products. Fish has a partner that trades NatGas and does revolting volume in that market. He just does not have his name anywhere to be seen. I do not think Fisher is as wild as he was. But he was and is the best floor trader I have ever seen. Especially when it comes to reading other traders. He is true madman on the floor. I have seen alot of fast talking and spitting in Chicago. Fisher is about the fastest talking loudest trader I have ever seen. If you want to learn floor trading ---learn from him and clear his shop. ACD is the only floor trading methodologies I have seen duplicated on the floor. You can go to their free seminars---he puts them on from time to time. You will find many very successful traders in NY using ACD. Interesting, though, I do not know anyone on the Chicago floors that uses it or has used it. It is like a NY thing. Another thing you guys need to understand is that NY markets allow dual trading. Sometimes the largest trader is the largest broker as well. I do not believe they have banned dual trading like they did in Chicago back in the day. However, you will read the CFTC reports about Coffee traders reaming customers and getting arrested every so often.
I buy the theory/reality that exchanges turning into for profit enterprises instead of member-owned, has driven the volume from pits to electronic (particularly Chicago). Since there are still options traded in the pits in Chicago, will the same thing happen there? What is the barrier to the for profit exchanges converting the options pits to electronic? Because, if I was confident that options were going to be mainly pit traded for 5 more years, then that is a move I would consider. Any input from current/former floor traders, gratefully received.
Well they are electronic. The guys all have hand helds and the 'pit' is just a central meating place. Much is automated. I do believe this 'pit/meeting' place environment has given our debt options unparalled depth. Options pit trading is the same as futures pit trading. But yet different. I don't know how to describe the difference here. They are much bigger than the futures. IMO, the top echelon of 'intelligent' traders in Chicago traffic in debt derivatives. Whether it be Eurostrips (GE) at the CME or options on the Bonds and Notes at the Cbot. They are much bigger than most of the Bond traders even realise. The market on the front month 10 year note puts and calls near in the money is obscene. New York option markets are a little more disorganized and more clubby IMO. The premium in the Silver and Gold options is just sick. They are fat and inefficient compared to Chicago (even the pit traded grains are very efficient by comparison --this is just my opinion though). That may be do to the size --driving competition and efficiencies in Chicago. As the bull market in Commodities grows --it will go through the same thing in NY. IMO, there will be pseudo floors for Commodities for a while to come. For no other reason than to trade options. Stock and index options do well electronic. When it comes to Commodities and especially Debt options. It gets more complicated for no other reason than the strategies tend to be more complicated on average. Also, there is a certain synergy that is produced by having guys all standing around with handhelds and talking working out pricing as the orders come in. They are being automated piece by piece. What drives it is the institutions. The institutions are very happy with the structure like at the Cbot. Most have had problems with the 100 percent machine environment that Eurex options trade in. I have seen and have had all kinds of complaints about Bund and Bobl options trading. Some day it will be all machines. Just not very soon for options.
people make markets. or at least, they should; if they don't, fade them. pits will be here until -- are you ready for this? -- until they aren't.
I wouldn't recommend the metals, especially Copper. There has been an influx of guys into those pits and they don't see consistent volume that you do in Crude or NatGas. I know three guys in Copper futs and two in options and they were killing it last year, and are flat to down for '05. All of them have the ability to trade from copper/gold/silver and ALL wish they were in crude/distillates or NG. NatGas is the way to go.
great thread guys, very interesting reading floor stories and also how some of you guys are making or have made the transition. The IPE closed its floor in april and went all electronic... interestingly, Brent crude in July did all time record volume of 187,000 contracts - vs the Nymex july peak of 145,000 contracts on their pit traded crude contract.