Question for NYMEX, NYBOT floor traders....

[riskarb]

Quote from TGM:

New York option markets are a little more disorganized and more clubby IMO. The premium in the Silver and Gold options is just sick. They are fat and inefficient compared to Chicago (even the pit traded grains are very efficient by comparison --this is just my opinion though). That may be do to the size --driving competition and efficiencies in Chicago. As the bull market in Commodities grows --it will go through the same thing in NY.

There are new guys hitting the floor every day in gold and silver options. The volume/head simply won't support profitable MM'ing for majority. My buddy trades all three on the options-side and is in the top 10 in size. He's been telling me all year that guys are forced to fill paper at FairVal and try to work the edge on futures due to the influx of new guys.

The money made outside of crude is really limited to trading the switches. Making a market in the futures-calendars seems to be the only game outside the crude/distillate/natgas markets.

 

[mcurto]

As someone who sees the order flow of the 5,10, and 30year options at the CBOT on a daily basis I would agree that it will be sometime before they are moved to the screen. A broker behind me fills for SAC Capital and often does the call around stuff for them in Sterling and Euribor options, and every single time he gets screwed. The order is often only shown to one market maker and it takes on the order of a minute or two to get quotes that lack size and depth. On the other hand, as others have said, the size one can do in the 10year options is unbelievable. Bank One routinely does 10k to 50k lot trades for Countrywide Financial without moving the market more than a tick or two. It is trully a unique market and would definitely be damaged if it was to go call around as tons of orders would be crossed internally. In the next few years there should be good opportunities in the 30 year options pit, I have noticed about five to ten new traders in there over the last few months.

 

[TGM]

Quote from riskarb:

There are new guys hitting the floor every day in gold and silver options. The volume/head simply won't support profitable MM'ing for majority. My buddy trades all three on the options-side and is in the top 10 in size. He's been telling me all year that guys are forced to fill paper at FairVal and try to work the edge on futures due to the influx of new guys.

The money made outside of crude is really limited to trading the switches. Making a market in the futures-calendars seems to be the only game outside the crude/distillate/natgas markets.

Thanks for the comments. Some of these guys are considering making a trading move so to speak. They keep PMing me. I will tell anyone to do your homework thoroughly before you commit. IMO, no matter what type of trading you do. You have to have some kind of direction edge anymore. I believe the days of making the bid/ask style living on any floor ---are over.

If you have any sense of direction ---you may do well. Just because there are new guys does not mean they can somke'em.

 

[okwon]

Quote from SethArb:

hey randolphfutures

maybe you can get yourself on a waiting list

for e miniNY crude oil futures permits

to trade for yourself on the floor ...

How do you get on the wait list?

 

[aPismoClam]

Quote from riskarb:

There are new guys hitting the floor every day in gold and silver options. The volume/head simply won't support profitable MM'ing for majority. My buddy trades all three on the options-side and is in the top 10 in size. He's been telling me all year that guys are forced to fill paper at FairVal and try to work the edge on futures due to the influx of new guys.

The money made outside of crude is really limited to trading the switches. Making a market in the futures-calendars seems to be the only game outside the crude/distillate/natgas markets.

look at the price of NYBOT seats. we've recently had an influx of disgruntled NYSE members. IF that isn't a sweet form of irony with much promise for more, I don't know what is.

last year the AMEX crowd came over en masse.

 

[petrotrader]

Thought this might be of interest...


Blackstone, General Atlantic in NYMEX bid-sources

(Changes first paragraph to add new source; adds details)

NEW YORK/PHILADELPHIA, Aug 15 (Reuters) - Two private equity firms and a venture capital firm are expected to launch a joint bid to buy a minority stake in the New York Mercantile Exchange in a deal that would guarantee open outcry trading for 10 years (emphasis mine), a source familiar with the situation said on Monday.

NYMEX is considering several options, including a potential initial public offering, amid record trade volumes and red hot oil prices that last week hit a record price of more than $67 per barrel.

Pit trading, in which traders yell bids and offers at each other at the exchange's downtown New York headquarters, is a big concern for traders, particularly as NYMEX's London counterpart, the International Petroleum Exchange, recently switched to an all-electronic trading format.

In April, Blackstone and Battery Ventures made an offer that would have slimmed down the NYMEX board from 24 to 11 members and move toward an initial public offering. General Atlantic had also been weighing its own offer of $240 million bid for a 20-percent equity stake in the exchange.

Now, the three firms plan to make a joint bid rather than submitting competing proposals, a source familiar with the situation said.

Private equity firms Blackstone and General Atlantic each would invest $100 million, while Battery Ventures, a Boston-based venture capital firm, would add $40 million, according to cable television network CNBC.

General Atlantic and Blackstone declined to comment. Battery Ventures could not be immediately reached for comment.

NYMEX, the world's largest energy bourse, would not comment on any potential deal, but spokeswoman Anu Ahluwalia confirmed that shareholders will vote after a September 20 meeting on the bourse's options.

"No deals can go through without the vote," she said. Shareholders will also weigh an IPO.

(Additional reporting by Jessica Hall in Philadelphia)

 

[Apex Capital]

Quote from TGM:

By the way, I don't doubt that Nymex floor traders are killing it.

You have no idea.
Why do you think that seat prices and leases are where they are???

 

[Apex Capital]

Quote from mtzianos:

So they take directional trades, not just quick scalps off order-flow?

NYMEX traders are first and foremost, SPREAD TRADERS.
You need to be able to understand how the products trade in regards to each other, ie.) crack spreads.

Very very few locals on the Nymex trade "directionally".

 

[Apex Capital]

Quote from TGM:

Pabst, if I were you. Since you already have the skill set for the floor. I would hop a plane to New York. If you do not like NatGas or Crude there are others with huge floor business. Comex has Copper and Gold and Silver. Gold and Silver especially. I would be willing to bet ----if you can make it on Chicago floors----you would make it on the New York floors. The markets in NY are wider than anything comparatively in Chicago. Even the Grain markets are tight. Gold and Silver are all over the place. You would s**t if you saw some of the stuff that goes on in New York.

I was a member of the COMEX, and also the NYBOT.
I also am old enough to know Pabst and his background on the CME. We speak throughout the year, as he and I have shared rather similar floor trading experiences.

I believe that you are a bit naive when it comes to your comments about Gold, Silver, and Copper.
As Pabst has mentioned earlier, VOLUME is everything . . . and the NYMEX has it!

 

[Apex Capital]

Quote from TGM:

Another thing you guys need to understand is that NY markets allow dual trading. Sometimes the largest trader is the largest broker as well. I do not believe they have banned dual trading like they did in Chicago back in the day.

Wrong.