this comes from the thread: http://www.elitetrader.com/vb/showthread.php?s=&postid=3257170#post3257170 and is related to the trailers of the film 'Floored': http://flooredthemovie.com/community/?page_id=11 the second trailer âThe Transitionâ prompts the questions why did/do some pit traders have a difficult time trading via a computer ? and anyone know of someone who went from computer to pit trading ? - why did they change, were they more successful in the pit or less ?
A "pit" trader has to be able to do both. They have to be able to quote electronically, follow the electronic market away from that exchange, and be able to interact with order flow coming into the trading crowd. Often, they are also interacting with order flow over the IM. This is all harder than you think.
I have seen traders try to go from pit to computer but never from computer to pit, although it has been done. Pit traders tend to have a hard time adjusting to computers because there is a lot of communication and transparency on the floor that you may or may not get on a computer. When you trade in the pits you develop "connections" and believe me, you quickly learn how valuable your connections are if you can develop them. I've seen people come into the pits brand new thinking their shit didn't stink and folks would refuse to trade with them. There is a camaraderie on the floor that you need to become a part of. Piss the wrong person off and it doesn't matter how high your Harvard GPA is. Folks just won't do business with you, nor will get develop those connections.
pit traders as "Floored" describes them are the pit guys from way before computers... pre 1997. Present day pit traders are really screen traders; some have 4+ monitors and sit all day. As mentioned before the advantage of the pit is that there is no FIFO. If your buddy is filling orders and he directs them all to you , you're rich.
Depends on the style of the trader. Some traders who were systematic on the floor adapted fairly easily to the screen. Scalping on the other hand can't be duplicated on the screen because it often happens in split seconds and as some of the earlier posters indicated above it depends on reliable, trusted and trusting trading partners. It can be a wink of an eye , not necessarily improper or illegal, or some particular body or hand gesture you would only know if you hung around those people for a while. When a broker has a large order to peel off no matter what are the rules he will get rid of it the most expeditious and safe (for him) way possible. This includes recognizing other traders who grew up with him, clerked with him, backed him up in emergencies, or were fair with him in the rare instances when there was an error, before recognizing a new small trader. One had to earn one's stripes. Of course there was also quite a bit of hanky-panky. So traders who found their place and had some talent did very well but unless they are adaptable they are like fish out of water when it comes to screen trading. Regards, 222bc
yea, the first trailer gave the impression the pit traders hated each other so it's a surprise about the relationship point, never thought of that think Jack Schwager mentioned pit to upstairs - computer trading in one or more of his books but can't remember what the personal anecdotes were don't think I could trade in the pits, I'm an absolute chartist/TAer and with commissions as low as they are these days there's not much financial incentive from that angle