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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures
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To: Gary E who wrote (14254)1/30/1999 9:35:00 AM
From: SE  Read Replies (1) of 44573
 
Pat or Tom might be better to chime in at this point. I think the key question there is if the online system goes down and I need to place a trade, just where am I calling and what is the process to get the trade to the floor. If you have to call CA and then they have to call Chicago....that is a big disadvantage. Whomever you call, they need to be able to get that order to the floor as quickly as possible. Pat calls and they relay the order in to the pit. Temple, if I remember correctly, has a line direct to the pit.

On my visit to the pit it became very clear why it is critical. When the SPOO is moving the action is fast and furious. There are people running all over the place. The order gets to the floor by being phoned into a bank of phones surrounding the pit. The person on the phone hand signals the order to the guy in the pit (who obviously must be watching the guy on the phone), the guy in the pit then turns and finds someone else in the pit that will trade with him and then turns back to the guy on the phone to relay the fill. The guy in the pit thens notes the trade on a slip of paper and a runner gets that slip and takes it whereever it needs to be taken to.

I had one broker call me and they wanted my business. I asked how the order would reach the floor and they said I would call CA and they would call Chicago for me. I said no thank you. Obviously that won't work for quick scalping type trades...maybe it is fine for positional trades, but even there slippage will add up over time.

Hope this helps.

-Scott
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