You have no idea what you are talking about. Rule 4.16 on the NYBOT says the following: (a) Prohibited Purchases. A Floor Broker may not purchase any Exchange Futures Contract or any Exchange Call Option or sell any Exchange Put Option for his own account or for any account in which he has any direct or indirect interest while holding an order of another Person for the same Commodity for the purchase of an Exchange Futures Contract or Exchange Call Option or sale of an Exchange Put Option, which is executable at the market price or at the price at which such purchase can be made for the Floor Broker's own account or for the account in which he has an interest. (b) Prohibited Sales. A Floor Broker may not sell any Exchange Futures Contract or any Exchange Call Option or buy any Exchange Put Option for his own account or for any account in which he has any direct or indirect interest while holding an order of another Person for the same Commodity for the sale of an Exchange Futures Contract or Exchange Call Option or purchase of an Exchange Put Option, which is executable at the market price or at the price at which such sale can be made for the Floor Broker's own account or for the account in which he has an interest.
The confusion here is that floor brokers can trade for themselves when there aren't any customer orders pending. If there are customer orders pending, though, those have to be executed first.
You mean front running isn't allowed on Nymex.... Well I'm not trading there then. To answer the earlier post about the price of CME seats relative to Nymex: after the IPO, CME seats no longer represent equity (ownership) in the exchange, but only trading rights (floor access an exchange fee discounts); whereas Nymex seats represent both.
The one aspect completely lacking from this thread has been the numerous clicks of traders that work together in pits for MANY years that bucket trades, tip off their buddies to the orders they have, and kickback to brokers upstairs so they can get the orders, effectively doing brokerage for free. And the big traders upstairs are not immune to asking "what's on the books". The relatively honest guys on the NYBOT have had their brokerage businesses decimated. 20 years ago you could get $2 a contract for executing a sugar trade, $3 for cocoa, and $3+ for coffee. You are of course welcome to come and try. But if you know no one you will sit in amazement and wonder how you get onto the fast spinning wheel. Take judicious note of a market that makes a move and how many people start marking trades. Try yelling out "why is everyone writing when I didn't hear any of you trade". You'll make lots of friends. Of course, you could go to Compliance. They'll be real helpful...HA! The NYBOT is ultimately doomed because it had no foresight, never threw a guy out themselves [to my knowledge] and the CFTC only once expelled a few guys who weren't at all the worst. I make a real good living because I'm real good at trading. I don't scalp. Frankly, the rush of grabbing a quick $1000 doesn't do it for me. When you are on the floor and can grab 200 lots because you know that the buying that hit the ring is going to be just the beginning of managed money flooding it, you have some big days in a given year. Could I retire? Yeah, and somewhat comfortably if I wanted to. And I making high six figures and more? Nope. But I make more on average than anyone I know not on Wall Street and that includes top doctors I know. But I do plan some day on answering to a higher power. You'll soon see, if you come down, that a good deal of people haven't let that thought cross their mind. You recall Enron and the like with scandals of mega millions ripped off? Find the guys who make the largest amounts. A handful will be very good and have large balls. The rest will be cut from the same cloth as a Ken Lay. The only reason you don't know their names is that operating as such can't yield them enough money for the authorities to care. And if one guy tells five buddied "get long 50 lots, quick" you are never going to prove in a court of law that anything happened. And they know it and don't care. What price is a soul worth? I don't know who is reading this. But I'll give you some sage advice gleened from many years on a few floors trading my own money: If you will do anything illegal to make really big money, you are on the road to perdition. You will make it your MO for trading. And one more thing. Wall Street has many more ex-millionaires than millionaires. So what is your soul worth today? Six figures? Seven figures? A few guys make that quite honestly. A few. Mike p.s. One more thing. Don't look for God in the pits. And I don't think that these big industry names mentioned talk to him on a regular basis either. It's kind of intriguing to hear such talk. Lots of guys made a lot of money [and I won't name names or say how] and suddenly got "honest". p.p.s. I saw Semel and Federbush's names mentioned in this thread. Hmm...seems they got booted for life in 1992. Many more have done more than they were booted for. And that it took years to remove them was just an example that the risk is worth it, to some. It's guys like that who have contributed to electronic trading. If the penalties were harsher, the floors would have stayed open longer, IMO.
Mike, Good Post! Confirms all I know about the Nybot. Electronic trading will kill these fools and the sooner the better.
One of the best threads I have come across over a long time. I personally trade electronic futures (switching from forex), but these floor details are quite interesting. Regards, redduke
.looking to get into trading oil. is this whole career of starting at the nymex as a clerk and working ur way up to a trader over? is this all going to be electronic?