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Pit Trading
- Thread starter will2205
- Start date
scratching my head ... wondering if I saw this ?
sure beats "trading places" ... thanks for tip
www.directcinema.com/dcl/title.php?id=358&list=132,358&alpha=
sure beats "trading places" ... thanks for tip
www.directcinema.com/dcl/title.php?id=358&list=132,358&alpha=
Daddyeaux,
Are you Cargill looking to hedge 5,000 corn futures or a huge cattle lot looking to move 1,000 live cattle futures? My guess is probably not. Commodities are generally illiquid and thrive upon the liquidity (whether one tick wide or ten ticks wide) that locals bring to the table. Granted, some of these guys are not that bright outside of the pit, but once they step foot into the pit they are like rocket scientists. These are not like the financial futures contracts, the whole world is not the market, the hedgers and speculators tend to be very localized and much smaller in scale than PIMCO and Citadel, and the rest of the hedge fund business for that matter. Throw commodity futures onto the screen and you create a recipe for smaller volumes and even more illiquid markets. The US grain markets are dominated by the select few (Cargill, ADM, Bunge). You can't tell me that they won't manipulate the markets on the screen to their advantage and to the disadvantage of the consumer. The price discovery provided by the pits is a value added proposition, at least in the grains and meats of Chicago. I can't speak from the New York point of view where the energies and metals tend to be more global in reach.
Are you Cargill looking to hedge 5,000 corn futures or a huge cattle lot looking to move 1,000 live cattle futures? My guess is probably not. Commodities are generally illiquid and thrive upon the liquidity (whether one tick wide or ten ticks wide) that locals bring to the table. Granted, some of these guys are not that bright outside of the pit, but once they step foot into the pit they are like rocket scientists. These are not like the financial futures contracts, the whole world is not the market, the hedgers and speculators tend to be very localized and much smaller in scale than PIMCO and Citadel, and the rest of the hedge fund business for that matter. Throw commodity futures onto the screen and you create a recipe for smaller volumes and even more illiquid markets. The US grain markets are dominated by the select few (Cargill, ADM, Bunge). You can't tell me that they won't manipulate the markets on the screen to their advantage and to the disadvantage of the consumer. The price discovery provided by the pits is a value added proposition, at least in the grains and meats of Chicago. I can't speak from the New York point of view where the energies and metals tend to be more global in reach.
Quote from SethArb:
scratching my head ... wondering if I saw this ?
sure beats "trading places" ... thanks for tip
www.directcinema.com/dcl/title.php?id=358&list=132,358&alpha=
Interesting, but who owns a VHS player anymore? I'll need a DVD version ...
Is it safe to assume that none of you are actual pit traders. If so I would like some feedback on trading stratgies from a floor perspective. I've spoke to some of the locals here in Minneapolis and have been told that they decide to go long or short base on the paper coming in to the pit.I anyone can elaborate on this let me know. All I do know is the majority completely ignore techincals.
Quote from will2205:
Is it safe to assume that none of you are actual pit traders. If so I would like some feedback on trading stratgies from a floor perspective. I've spoke to some of the locals here in Minneapolis and have been told that they decide to go long or short base on the paper coming in to the pit.I anyone can elaborate on this let me know. All I do know is the majority completely ignore techincals.
Technicals are for traders that sit at home and lose money.
Pit traders make money off of order flow, as you said.