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BrentinUtahsDixie wrote:
>
> RT's,
> I have a question for those in the know. What I would like to know is a
> what point in a floor transaction is the price actually determined? Is it
> when a runner takes a ticket to be recorded in some fashion? Or is some
> person in the pit punching it into some device after a bid is accepted.
> Just how do they keep track of the price. I have seen movies and photos of
> traders standing there holding up there arms showing various hand signals,
> but its not clear to me how or when a price is set. Help anyone?
>
> Thanks,
> Brent
Brent,
Price is determined by the traders on the floor at the moment that a
buyer and a seller agree on a price. You say, "buy 5 march beans at
668" and I say "sell 10 march beans at 669". You then say "buy 5 march
beans at 668 1/2 and I say, "sold you 5 march beans at 668 1/2". It is
at that moment that the price and a trade is determined. Sometimes in
thin markets, the price can move without any trades, as the traders move
the bid and ask up and down based on some indicator, perhaps a related
market, without actually trading.
If you plan to seriously pursue trading, I highly recommend you make a
trip to Chicago to see the trading floors first hand.
Regards,
Norman
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