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I am sure that those who have no idea what is going on in the pits will get a
little education from your trip. Remember, the guy in the pit is taking the
other side of the worlds trades. Ira
Howard Hopkins wrote:
> RT,s;
>
> I've been daytrading the S&P's for almost three years now. I had never been
> to the Merc or even to Chicago until last week.
>
> A little history first so you can understand impact of my visit to the pit.
>
> I started trading with Jack Carl Futures (3 months) and then went to
> Rosenthal Collins (for one year). I had an account over $100k so they give
> you access to their floor desks for orders "near the market". Otherwise you
> need to place orders away from the market through a desk off the floor.
>
> I can't tell you how bad my experience was with these two companies. I would
> not be trading today if I hadn't found my current broker. It would take 15
> to twenty minutes or more (you weren't allowed to call them for fills) to
> get fills back, you were treated like a number instead of a customer and
> they were rude and very intimidating when you called to place orders. The
> bottom line is that they did everything wrong in terms of customer service
> because the guys working the desks had no vested interest in your success.
>
> The broker I've been using now for almost two years is a CME member. He is
> at the trading desk everyday. Your desire and willingness to trade directly
> affect his bottom line and he is on your side fighting for better fills and
> excited when you make a good trade. They answer the phone within two rings
> quoting the bid/offer in the pit. They memorize your account number after a
> few days so you just have to say, "this is Howard, buy five at the market"
> and boom you order is arbed in to the pit.
>
> Why am I going on and on about my broker? Because he let me stand down with
> him at his desk in the pit for a day and 1/2. He introduced me to the
> clerks and traders that fill my orders. Everyone was extremely nice and
> friendly. One of the trader's let me stand next to him at the rim of the
> pit and explained everything going on (Borsellino was just three guys away
> from me).
>
> It turned out that my former desk at Rosenthall Collins was right next to my
> current broker. The asshole clerk Andy that had caused me so much stress
> was still there. Andy was reading the paper, constantly horseplaying with a
> guy from the Smith Barney desk, and answering the phone "S&P's" with no idea
> where the market was because he wasn't even paying attention to the pit. On
> Thursday morning the other clerk at Rosenthal Collins was asleep on the desk
> for 2 1/2 hours... seriously, he slept from right after the open until
> lunch!!!!!!! These were the guys that were placing my orders in the
> volatile S&P!!!???
>
> Conclusion: If all the guys/gals at your trading desk (there is more
> females on the floor than I thought) are wearing gold jackets (clerks and
> runner colors) than the people working your trades and orders probably have
> no vested interest in your success or satisfaction with their service.
>
> Other observations: Time/sales sequence is partially random. One guy
> sitting up on a platform at the front of the pit keys in the trade prices
> that are signaled to him from the traders. The pit has 300-400 people when
> full. If he is looking to one side of the pit and someone signals a trade
> he may have missed a trade a few seconds earlier from the other side of the
> pit. At one point on the morning of 7/12, the price board showed the last
> trade at 1509.00 while 1507.00 was actually trading. In other words, even
> the board in the pit is delayed and that is why I always have a squawkbox on
> and watch the emini's. Then you have a more accurate picture of where the
> market "really" is.
>
> Another thing I hear a lot of traders complain about is how locals have a
> license to steal with the type of bid/ask spread we are seeing these days.
> They do have an edge due to their ability to get in and out quickly and to
> see order flow into the pit, but the truth is they have no more idea where
> the market is going than you and I sitting at home watching our screens. An
> example of this is Thursday before last (7/6) when the market began this
> recent advance. My broker has a friend who's a great trader and an "A"
> local. The market was near the lows and Merrill bid on 100 lot. The local
> hit him. Then Merrill bid on another 100 and the local hit him again. Then
> all the institutions started buying and drove the market up over 15 handles
> in 45 minutes on what my guy estimated was 4000-6000 contracts. This local
> got absolutely killed that day. He didn't 'know' what the market was doing
> but placed a bet and lost...big.
>
> Hope my field trip was as informative and entertaining for you as it was for
> me. :)
>
> Howard
>
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