Yeah like I'm thinking, imagine all those clerks on the floor of NYSE that have been putting in years and years of hard work, taking tons of crap, slave type work. Watch the NYSE eliminate the specialists in a few years and all these clerks get screwed. It could be a very similiar scenario with futures pits. 100K gross a year on about 1 mil to 1.5 mil with a rate of half penny a share seems to come to about 700 bucks net a week by my bery rough calculations. I think you are better off going net and develop yourself to stop churning.
Some clerks in the NY pits make in excess of 70K/year working 5 hour days so don't knock it. My opinion about floor vs. screen. If you can take the learning curve associated with screen trading you'd be better off. I just started pit trading in Cotton a week ago and had a scratch week so far. I find it hard now since I am 10 years removed from it, and at the bottom of the totem pole. Never underestimate the unfairness of open outcry. I would jump and gesticulate and shout my ass off to buy from a broker across the pit and the local next to him who has traded w him for 10 years lifts the offer since he sees me trying to buy it from him and I get squat. With screens it is meritocracy -1st come,served. Unless you have a huge wad so you can start trading size in a couple of weeks to establish pit presence, you have to pay your dues.Pit is also feast or famine since you are in 1 pit maybe 2.Could you stand to scratch 11 months hoping that you are on the right side of a frost/no frost? Lastly, the seats are really expensive to buy/lease. To trade nymex 18K/mo to lease. NYBOT 1K/mo about to go probably $1500/mo. Add to that the arb or break clerk if you are in options and it adds up. I've seen traders there in nat gas have 5-6 figure days, BUT you do't hear 90% of the guys who eke...good luck.
besides the monthly leasing prices. How much money do you need in your account to trade w/ some moderate sizeon the floor. any input would be great newbie
the amount of your account exclulsive of any expenses you might incurr depends on the interplay of 2/3 things- 1st :the requirements set by the clearing firm who has to offer the exchange a "guarantee" on your behalf . 2nd. The contract(s) you want to trade. Case in point . If you want to trade as a mkt maker in Cotton options which is a big contract they would need at least 50K in your account. I you want to trade NAT GAS which is a huge contract and a volatile one with big margins, they'd probably want 100k. If you go there with 90K will they let you?Probably as long as an existing customer can vouch for you or if the firm want to bump up their revenues. They are a business much like everyone else. It is kinda part politics part hard cash. The smallest contract there is OJ which is $1.5 per point so they might let you in with 25K and you can be a 30 lot trader,etc. 3rd: Some exchanges have minimum account sizes so research that. Rule of thumb is that it really depends on the margin of the contracts you want to trade. Good luck.
for a beginner which pit would you recommend...a slower pit like o.j. a moderate pit like silver...or a huge pit like crude or nat gas? Thanks
Really depends on your personality. I've heard of traders in Chicago just starting out will less $ than most start in the MidAM where the leases are cheaper & contracts are smaller.Ditto for OJ in NY and KCBT in wheat. I defintely would'nt recommend the big contracts due to vol and equity swings inherent in trading such vehicles. Imagine starting out in nat gas where the leases are 18k/month. You' have to ramp up to 20-50 contracts in 2 weeks to grind out those ticks needed to pay for the seat lease alone! Call the clearing firms of the exchange you're interested in, meet with them, tell them your concerns, lay out your finances your expectations and feel them out . IMHO, if you are really interested in floor be a clerk first for you might not even want it once you get to taste the spit of the guy next to you. All I know is first thing 1 want to do after getting home is shower! Best of luck.