Hello I hope someone can help me and explain what those terms mean/traders do? Commercials and locals, and what is the difference between them and a broker? And can someone separate the commercials from the locals? without actually standing in the pit and watch them? And who is responsible for the biggest volume âtradingâ (CME the ES)? Thanks for the help Simon
The "commercials" are people that actually have something to do with the actual physical commodity that is being traded, such as the refiners or oil companies in the crude or gasoline pits, the farmers in the grain pits, gold producers like Homestake or Newmont Mining in the precious metals pits, the banks in the T-Bond pit, etc. A "local" is an independent trader with no affiliation to any commercial use of the commodity. A "local" trades his own personal account.
Hello Simon: How are you. We haven't spoken in a while. For additional info, go to your bookstore and get a copy of Grant Noble's book titled "The Trader's Edge" published by McGraw-Hill. In Chapters 9 and 10 ("A short introduction to Commercials", and "Reading their Mail: The Committment of Traders Report") you can get a bit more color as to how a commercial participant acts in the market and why. Take you time. I hope you are not putting yourself at risk just yet. Best Regards, and Merry Christmas Steve Edit: You asked a couple of additional questions about recognizing who is a local and who is a commerical. If you work in the pit. If for instance you are a local yourself. Depending on the market, you will eventually get to know who is who. Outside the pit, frankly it does not (or in my opinion, should not) matter who they are. Each has a specific agenda to pursue. If you have a good broker who maintains a presence in the pit, they can tell you who the big players are (if you are curious). Brokers like Man Financial for instance can fill you in. Also there are folks at each exchange who are glad to help you.
Thanks Apex Steve, I am fine thanks. I hope everything is fine with you, thanks for the book. I am not risking anything not even trading on a simulator yet, I have a long way to go..butt is fun when you are interested about what you do. Marry chrismas to you. Best regards all the way from Sweden Simon