PIMCO on Floor Vs. Screen
- Thread starter bone
- Start date
I really wanted to follow along with this trade!
NO, pit traders can take down institutional size. What do you consider size? I didn't trade Eurodollars options but clerked there, they take down plenty for most of the paper coming into the pit, everything else trades otc. Traders in that pit are well capitalized, after all, some of them are banks.
I've seen this before where Jim Kramer said the only way size gets done in equity options is upstairs. This is utter bullshit. Upstairs squeezes the floor for edge for the berries and the otc trades. From reading his articles, I've been on the other side of his size plenty of times(and he claims to have been one of the biggest equity option traders).
Hey, I miss the pit. Really. It was great while it lasted. Alot of camaraderie, and locals could get some real plums. But if I were to go back to the pit, it would be in the grains or livestock or NYMEX. Splitting liquidity is not going to help pit locals and floor brokers, and raising electronic fees to keep the floor barely breathing is no way to hang on - because I agree with PIMCO that this policy is burning bridges and making institutions do more stuff OTC and on the screen.
For smaller traders and newer traders, I think the screen is much more fair and impartial. FIFO is imminently more fair than the pit. There is nothing fair about the pit. Floor Brokers understandably don't want to split up orders in a moving market, but the screen maintains fairness in all market conditions.
Hey, for all you nostalgic Chicago pit lovers, God Bless. Really. Have fun. But it's not going to make a comeback versus the screen. I think the verdict has arrived. The CBOT financial futures complex does 75% of their volume on the screen. The CBOT building is leasing ALOT of office space to electronic trading firms. The price of memberships, while having stabilized and even slightly appreciated as of late, is just a fraction of what it once was. A friend sold his AM in 1997 for $500K to trade energy, and he bought it back last year for $89K.
If you can make a living in the pit, beautiful. Count your blessings. You can do it super cheap. Lease an AM for $900/month and go trade 5 and 10 lots with a $20K account. It's that cheap to trade on the CBOT financial floor these days.
But all things are relative to opportunity. AMs leased for $4K per month five years ago.
For smaller traders and newer traders, I think the screen is much more fair and impartial. FIFO is imminently more fair than the pit. There is nothing fair about the pit. Floor Brokers understandably don't want to split up orders in a moving market, but the screen maintains fairness in all market conditions.
Hey, for all you nostalgic Chicago pit lovers, God Bless. Really. Have fun. But it's not going to make a comeback versus the screen. I think the verdict has arrived. The CBOT financial futures complex does 75% of their volume on the screen. The CBOT building is leasing ALOT of office space to electronic trading firms. The price of memberships, while having stabilized and even slightly appreciated as of late, is just a fraction of what it once was. A friend sold his AM in 1997 for $500K to trade energy, and he bought it back last year for $89K.
If you can make a living in the pit, beautiful. Count your blessings. You can do it super cheap. Lease an AM for $900/month and go trade 5 and 10 lots with a $20K account. It's that cheap to trade on the CBOT financial floor these days.
But all things are relative to opportunity. AMs leased for $4K per month five years ago.
Hey, look just for the record, I am not a local. I do not trade in Chicago and I do not even live in Chicago. Just so you know I have no angle here and no agenda to push. I have traded equity options for 7 years. OK? Are we cool? Fine, let's move on.
So I could care less what the end result would be. My first post on this thread was simply a statement about how I thought the exchanges in Chicago were going to merge to become one. I believe they don't have any choice because of the cost of keeping three exchanges which all trade inter related products is not practical.
Then out of nowhere this thread becomes this anti-local, I hate paying spreads, screw Chicago, I mean where did all of that come from. Look, in any business you have to play the rules of the game. Fact of life. If the floor is that corrupt or that expensive trust me, the order flow going there will cease. This is a fact. Markets look for eficiency and lowest cost.
The funny thing is when ISE came on the scene I was in Chicago at that time 4 years ago on the CBOE and everyone kept saying that was it, close the exchanges, it's all going electronic. Yet four years later the exchanges are still alive and well, not all of them, but the CBOE and Amex are very competitive. In fact, I send more trades through the CBOE then the ISE. I get better fills, can trade more size, and much more reliable in fast markets. But that's another story.
I also heard way way way back when the bull market was just getting primed that the NYSE was done. That nasdaq was going to take over and there would no trading floor for equities, yet many many years later the NYSE still exits and so does the specialist system.
Here is a brief excerpt from that article I posted, and yes I know its from 2001, I posted that because it had some interesting tidbits in there:
Chicagoâs financial exchanges play a significant role in the Cityâs business community. According to the most recent study by the Civic Committee of the Commercial Club of Chicago, over 150,000 jobs are generated in our city by this sector. This includes opportunities for thousands of graduates of our cityâs high schools and colleges, and those with advanced degrees. The derivatives industry in Chicago also generates over $85 billion in overnight deposits in local banks, plus millions in federal, state and local taxes, and they are a major tourist attraction for the City
Again I say, a lot of my argument for defending the exchanges and the reason why I think they will continue to co-exist on some level is because of the economic impact it would have not only on the city of Chicago, the state of Illinois as a whole, but the entire country I don't think anyone is going to let that happen but who knows maybe I'm wrong and maybe 10 years from now Springfield will be the most populace city in IL. Because, I'll tell you what, they lose those three exchanges and that city is done, I mean done. There is just too much at stake here. Now does that mean that open outcry will continue in the future who knows. My statement was regarding the exchanges themselves.
For some reason all sorts of people came out of the closet with more anti-local rhetoric then these whacked out anti-war mongers. I mean do you guys really hate locals more then the Al Qaida? Lets get our priorities straight here especially since we are on the eve of a major war. Look, I can't tell you how many times I get screwed by option mm's ok. I can't tell you how many times I have been screwed by a specialist in a stock. But you know what, I deal with it because the opportunity it provides me with is tremendous.
Oh and as for this nobility? Look, I never said locals were noble, f*ck is there anyone in this profession that is noble? What daytraders, analysts, brokers, investment bankers, hedge fund managers? I mean come on, everyone one of these people is out for a buck. Aren't you? So lets put that to rest right now.
You know i came across an interesting article some time ago that was talking about the number of people who over time have been successful at speculating going all the way back to like the 1600's. They said even 400 years ago about 90% of the people who made a try at it failed. Same numbers from 300 and 200 and 100 years ago. Same percentage failed in the 1920's, the 1950's and 1980's. All the way up to today. That 90% number is still alive and well. The interesting thing about this article was and that it pointed out that despite all the information we have today, the lower cost of trading, electronic lightening fast executions, all these fancy charts and instant news, despite all of that, technology has in no way shape or form allowed more people to make money at speculating. I just thought that was interesting.
Bottom line, trade where you want to trade, whatever product, whatever exchange, whatever timeframe, just don't blame others for your failures. People don't fail at trading because of bad fills and high commissions and greedy specialists and evil locals, they fail because they can't trade.
So I could care less what the end result would be. My first post on this thread was simply a statement about how I thought the exchanges in Chicago were going to merge to become one. I believe they don't have any choice because of the cost of keeping three exchanges which all trade inter related products is not practical.
Then out of nowhere this thread becomes this anti-local, I hate paying spreads, screw Chicago, I mean where did all of that come from. Look, in any business you have to play the rules of the game. Fact of life. If the floor is that corrupt or that expensive trust me, the order flow going there will cease. This is a fact. Markets look for eficiency and lowest cost.
The funny thing is when ISE came on the scene I was in Chicago at that time 4 years ago on the CBOE and everyone kept saying that was it, close the exchanges, it's all going electronic. Yet four years later the exchanges are still alive and well, not all of them, but the CBOE and Amex are very competitive. In fact, I send more trades through the CBOE then the ISE. I get better fills, can trade more size, and much more reliable in fast markets. But that's another story.
I also heard way way way back when the bull market was just getting primed that the NYSE was done. That nasdaq was going to take over and there would no trading floor for equities, yet many many years later the NYSE still exits and so does the specialist system.
Here is a brief excerpt from that article I posted, and yes I know its from 2001, I posted that because it had some interesting tidbits in there:
Chicagoâs financial exchanges play a significant role in the Cityâs business community. According to the most recent study by the Civic Committee of the Commercial Club of Chicago, over 150,000 jobs are generated in our city by this sector. This includes opportunities for thousands of graduates of our cityâs high schools and colleges, and those with advanced degrees. The derivatives industry in Chicago also generates over $85 billion in overnight deposits in local banks, plus millions in federal, state and local taxes, and they are a major tourist attraction for the City
Again I say, a lot of my argument for defending the exchanges and the reason why I think they will continue to co-exist on some level is because of the economic impact it would have not only on the city of Chicago, the state of Illinois as a whole, but the entire country I don't think anyone is going to let that happen but who knows maybe I'm wrong and maybe 10 years from now Springfield will be the most populace city in IL. Because, I'll tell you what, they lose those three exchanges and that city is done, I mean done. There is just too much at stake here. Now does that mean that open outcry will continue in the future who knows. My statement was regarding the exchanges themselves.
For some reason all sorts of people came out of the closet with more anti-local rhetoric then these whacked out anti-war mongers. I mean do you guys really hate locals more then the Al Qaida? Lets get our priorities straight here especially since we are on the eve of a major war. Look, I can't tell you how many times I get screwed by option mm's ok. I can't tell you how many times I have been screwed by a specialist in a stock. But you know what, I deal with it because the opportunity it provides me with is tremendous.
Oh and as for this nobility? Look, I never said locals were noble, f*ck is there anyone in this profession that is noble? What daytraders, analysts, brokers, investment bankers, hedge fund managers? I mean come on, everyone one of these people is out for a buck. Aren't you? So lets put that to rest right now.
You know i came across an interesting article some time ago that was talking about the number of people who over time have been successful at speculating going all the way back to like the 1600's. They said even 400 years ago about 90% of the people who made a try at it failed. Same numbers from 300 and 200 and 100 years ago. Same percentage failed in the 1920's, the 1950's and 1980's. All the way up to today. That 90% number is still alive and well. The interesting thing about this article was and that it pointed out that despite all the information we have today, the lower cost of trading, electronic lightening fast executions, all these fancy charts and instant news, despite all of that, technology has in no way shape or form allowed more people to make money at speculating. I just thought that was interesting.
Bottom line, trade where you want to trade, whatever product, whatever exchange, whatever timeframe, just don't blame others for your failures. People don't fail at trading because of bad fills and high commissions and greedy specialists and evil locals, they fail because they can't trade.
Equities and equity options.