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Dear Tim,
I do trade directly to the floor as you do but I was responding to the 1 or 2 lot
full size trader, not the size trader.
I have a strong feeling that there are many smaller size traders on the list and was
responding to them in my comments about the mini.
I have no "angle" and no hidden agenda.
Manning Stoller
Timothy Morge wrote:
> Folks on the list:
>
> I have no bones to pick with vendors or electronic trading fans or pit traders
> or brokers. If you've read the lists lately, you know I feel the pit traders and
> pit brokers at the exchanges have led the parade for the move to fully
> implemented electronic trading. I'll be sad when the open outcry stops, but I'll
> be a happier trader.
>
> HOWEVER...For any broker to tell this list or any other list that on a
> consistent basis, you can or will get better fills, faster fills, better
> service, faster service is just plain hype. At the moment, electronic trading is
> a good venue for traders that have a smaller account and cannot find a full
> service broker that allows them pit access. By pit access, I mean that when *I*
> trade the S&Ps, I dial using my speed dialer. A floor clerk AT THE S&P PIT picks
> up the phone and answers quoting the current bid and ask of the front month S&P
> contract before even saying hello. I say, 'Hi, it's Tim...buy XX Sep S&Ps
> market,' and they flash that order into the pit, all the while quoting me the
> current prices, then tell me my fill. I am answered and filled in less time than
> it takes for an electronic order to hit the electronic pad in the pit and get
> picked up. And this talk of 'better fills' on the electronic services...sorry,
> it just isn't so. If you are getting poor service from your broker, change
> brokers. Don't just listen to some guy with a vested interest tell you that all
> your problems will be answered if you just switch to his new doodad.
>
> And if the market is less orderly, you can bet my fill will be faster and the
> service better.
>
> As I said, the day for electronic trading in all the pits is near. But until
> it's implemented, please don't make these wild claims about electronic trading.
> It doesn't help the electronic trading cause, because people try it and find the
> unrealistic claims are just that: Unrealistic. Saying that you will get better
> fills and better service using electronic services on the Merc and CBOT right
> now is like saying you'll get better fills and service using the Mid-Am currency
> contracts instead of the IMM full currency contracts.
>
> And similarly, you WILL be paying the extra brokerage if you trade the E-minis,
> although apparently some brokers will lower their 'low' commisions if you switch
> over to trade electronically with them. But what rates are they charging? Again,
> I have no complaints with any brokers--many of my friends are brokers. But when
> someone claims they will only charge you half the brokerage fees to trade
> E*minis through them, you had better check their rates relative to other brokers
> offering accounts of your size similar service. Remember!! It costs a broker the
> same per contract to clear one E*mini as it does to clear one S&P contract. So
> their costs are literally five times higher for clearing five E-minis versus
> clearing one S&P.
>
> Last, the E-minis are the tale and the S&Ps are the dog. Currently, you can't
> get out of your E*mini electronically on a stop. Nor can you enter or exit 'at
> the market.' When you visit the S&P pits, you can see the thirty or so people
> that huddle around the E-mini quote stations and arbitrage the orders that are
> sent to those machines from the brokers off of the exchange floor. Those locals
> are not going to take the orders off of those machines and fill them UNLESS they
> are able to make money. That's why they call it arbitrage.
>
> Tim Morge
>
> IdontgetNo@xxxxxxx wrote:
> >
> > Subject: Re: Trade mini instead if regular S&P
> > Date: Mon, 15 Jun 1998 08:46:55 EDT
> > From: IdontgetNo@xxxxxxx
> > To: mstoller@xxxxxxxxxxxxx
> >
> > Well I don't know which company your with or from what angle your coming from
> > but the mini's can never compare to the pit trading. Many times the mini will
> > print a new low but the big ones never will. Speed? I can place an order for
> > my clients faster than any computer terminal can. Oh and yes I get my fills
> > right away. Maybe that's a specialty that I have obtained after being in this
> > business for 15 years but you must be doing something right if your around
> > this long.
> >
> > Morris
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