How do people trade in the pits?

Quote from Landis82:

Very true.
The pit is FULL of information.

You just need to be able to have a super quick brain ( and somewhat hyper ) personality in order to constantly "scan" what is going on. You must be able to PROCESS a lot of data and behavior very quickly . . . to that point where you simply REACT to what is happening, rather than being caught like a "deer in headlights" and spending far too much time "thinking" things through.

Either your reactions in the pit become second "nature" to you, or they don't.

I once stood next to a guy that was a total "rug-rat" . . . meaning that he was a pure scalper that was only in a trade for ONE SINGLE TICK. If he got an "edge" and a broker sold him 5 lots on the bid, he would immediately offer them at the current offer, NO HESITATION or questions whatsoever.

He made a decent living keeping it simple, and just trying to "chisel" one tick out of a trade many times a day . . . Not bad for a former Irish accountant from Long Island that did my taxes back in '87. :)

He eventually moved over to the NYMEX in 1989 and became a "legend" in the Natural Gas pit. The guy would go home with 200 lot positions, which is absolutely insane because anyone that knows about the futures markets knows that Nat-Gas is without a doubt the most volatile Gorilla on the board. A multi-millionaire several times over.
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so today, where is he now this legend ?
 
Quote from jjk2:

so today, where is he now this legend ?
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I believe that he is still on the NYMEX, but he might be spending more time with his family.
He goes by the name of "Fitzy".

You can always "lease" out your seat for 6 months at a time and make a ton of money just off the lease.

:)
 
There is a waiting list for a NYMEX seat these days. If you had one to lease out you'd want to be using it these days.


Loads of paper.
 
Quote from dipper17:

There is a waiting list for a NYMEX seat these days. If you had one to lease out you'd want to be using it these days.

Loads of paper.
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Very true.

But if you are 48 years old and need a small "vacation" from your last 15-20 years as a trader, the amount of income that the lease generates is very substantial. Roughly 2% of the most recent membership sale.
:)
 
Quote from jjk2:

btw what are these seats? are they like shares in the exchange?
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Yea there are no more seats per se, since the exchanges demutualized they no longer called seats
 
Quote from jjk2:

btw what are these seats? are they like shares in the exchange?
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Yes, the term "seat" is synonymous with membership. And the capital requirement of any member trading on the NYMEX floor ( for example ) is $50,000 while the COMEX requirement is only $25,000.

In the end, it is the Clearing Firm that winds-up "guaranteeing" the member.
They are on the hook for any and all unsatisfied financial obligations of the lessee or permit trader to the Exchange and its Members.

See the following weblink for the latest prices for NYMEX and COMEX membership:

http://www.nymex.com/ss_bids_offers.aspx
 
Quote from Landis82:

I believe that he is still on the NYMEX, but he might be spending more time with his family.
He goes by the name of "Fitzy".

You can always "lease" out your seat for 6 months at a time and make a ton of money just off the lease.

:)
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this is crazy! how does one maintain such massive risk exposure for a long time? but i guess its possible out of the millions of traders a guy like that is certainly possible.
 
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