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> Reply to TRafferty@xxxxxxx:
Thanks for your response. It's interesting and valuable for me as a pit trader to
listen to and understand the thinking of the trading public off the floor. I do
have a few points in response which you may find of some value.
First, if you are really trading 5-20 lots and you don't have a relationship with
your pit broker, and assuming your trades generally go to the same pits, you need
to rethink your fill tactics. You should be able to develop a working relationship
with the pit brokers. In my market, it is done all the time for those quantities.
One lots, probably not. It may not be feasible in some pits, your scale may be too
small for Bonds or S&Ps for example.
Second, you may be able to pick up good information from your FCM from the trading
floor as to what is happening and what the rest of the public is thinking and
doing. For example, it makes a huge difference if a spread is widening because
commercial firms are pushing it, or if large locals are doing so. Getting a gauge
on the market before the opening for the opening call is crucial. What news is the
market listening to? Your pit broker or their clerk should be able to give you
valuable qualitative information.
Third, on the contrary, you do have choices as to who fills your order. And it
does make a difference. Push it a little. If you have never had a fill better than
your limit, shop around. Haggle. How often would you use a real estate broker if
he could only get you the asking price? Further, and most important, use the
people you develop confidence in to their fullest. Give them a little discretion,
and your fills will improve, but only AFTER they have earned your confidence.
Emphatically, you are right that the brokers are working for you. All I am saying
is this: expect more.
BTW, as to who gets the difference if the market barrels through your limit order,
and is actually filled better than your limit. You should be. The pit broker
records that price on his ticket immediately and that price must be given to the
customer. It is pretty hard for an FCM to get around this.
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