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Dear Patrick,
Two years ago I spent a week on the floor next to several guys I had met who
were members. Among the other things that I saw were just what you mentioned
here, namely, ex-floor traders who had "graduated" by getting their own Globex
terminal and were now trading from the first or second row of desks just above
the top-step brokers. These guys were true scalpers, trading relatively large
size on the E-Mini for no more than a few ticks (with limit orders) based on a
variety of strategies, among them simply watching the interplay between the
phone brokers at their desks and the top-step brokers in the pit. It reminded
me about what in biology is known as a commensal relationship, for example, the
little fishes that swim around the mouths of sharks and the birds who clean the
alligators' teeth. I would encourage any off-floor trader, before spending
one's next few hundred dollars for more hard- or software, to spend a few days
on the floor --- just go, shut your mouth, open your eyes, get bumped and
jostled around, see the chaos, hear the cacophony, and take it all in. It was
an education I shall never forget. I wish I had done it much, much earlier in
my trading career.
Sincerely,
Richard
Patrick White wrote:
> Chris,
> FWIW:
> Be very careful when using TOPS as your order routing mechanism into actual
> pits. While I lived in Minneapolis I visited Chicago several times and spent
> a few days watching the action at the CME. There is always a cluster of
> traders directly around the TOPS stations which are planted 1 step up from
> the floor of the pit. It was our observation that market orders coming into
> those terminals were routinely filled at the worst end of the current
> trading range. This broker would routinely bid or offer prices that were
> well away from where trading was going on (at least .5 off from the current
> price and often 1-2 full points) in the rest of the pit. My own experience
> confirmed what I saw in the pit: the customer is getting robbed. I would
> only use this type of order entry in a case where you specify a price (limit
> / fok).
>
> The guy who was posting about getting robbed 1 tick each way in the S&Ps by
> Interactive Broker may want to use this as a benchmark to compare his own
> experience against.
>
> Patrick White
>
> Subscribe to the TraderSimulator list by sending an email to:
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>
> or by visiting the site and clicking on the Subscribe link:
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>
> ----- Original Message -----
> From: "Chris Cheatham" <nchrisc@xxxxxxxxxxxxx>
> To: "Omega List" <omega-list@xxxxxxxxxx>; "Richard Josslin"
> <TaoOfDow@xxxxxxxxxxxxxx>
> Sent: Monday, May 22, 2000 11:09 PM
> Subject: Re: $25K "Deposit" for Globex Terminal???
>
> On a related topic...
>
> LFG told me a couple of weeks ago that they would be offering direct access
> to Globex via LEOWEB for markets in addition to the eminis very shortly,
> i.e. weeks not months. Not as good as seeing the book on the globex screen,
> but definately better than today.
>
> Regards,
> Chris
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