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Richard:
If you are able to get on the trading floor, especially in a booth that is next
to the SP pit, schedule as much time as you can to stay in one pit. If they
won't let you stay in the SP pit, ask which one they have you can stay in and
then stay in that pit and try to develop an eye for what's going on. Just having
someone explain a five minute tour isn't going to help you--If you can stand and
watch the phone clerks fill orders with hand signals and then watch them get
their flash fills, as well as watch large paper come into the pit and watch the
pit literally 'roll' as the locals try to get to the action, that's what will
help your trading.
And imagine it's you calling in those orders and watch the flow....Also, locate
the local brokers holding the electronic trading machines--better, have your
floor person point out the different firms and different machines. Watch how the
orders come in and get flashed in and filled and flashed back. Try to stay as
long as possible and if you get comfortable, take out some paper and a pen and
see if you can 'feel' the markets retrace and practice making a few trades as
you hear and feel the markets wax and wane. This will give you a much better
feel for what the other side of your trades look like--in the sense that they
are being handled by locals.
You might also try to get them to teach you the basic hand signals before you go
to the pit and then you can read the signals and get a feel for how far behind
even the 'clacker' boards are in markets like the SPs that are rockin...
The CBOT...lots of noise, but not quite as interesting. Again, try to see the
order flow and see how many hands they go through...get a feel for how the
locals handle the market-moving orders. It's not as easy to follow at first,
since they don't rely on hand signals. But try to get yourself into the clerk's
head that is handling the closest phone--hopefully that will be right at the
desk you normally call with your orders, so you can see how they move your
orders around.
I hope you have a great time at the exchanges...they might not be there forever.
Make sure you eat at the Merc club...go there after the close and buy your
broker a few beers...
Best,
Tim Morge
Richard Josslin wrote:
>
> Dear Group,
>
> I leave Seattle this Friday to spend some time in Chicago (for the first
> time since 1952, when my father took me to a national political
> convention). While I am there, my broker has arranged for me to spend
> Wednesday on the CBOT floor (mainly Bonds & Dow) and Thursday on the CME
> floor (S&P), "shadowing" the broker's floor managers.
>
> What should I be looking for?
>
> What information can be gleaned from such a visit?
>
> While I've been trading for many years, I've never personally observed
> the action on the floor. I request your suggestions, particularly from
> those of you who have some experience on the floor, on how I might
> maximize my opportunity.
>
> I also invite suggestions re fun things to do and interesting places to
> see in Chicago --- I'll have a room a few blocks away from the exchanges
> but no car, so all transportation will need to be public.
>
> Sincerely,
>
> Richard Josslin
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