View Full Version : Trading off the floor

02-21-2002, 12:07 PM
I have traded futures (most financials) off the floor twice in the past. To be honest, with no success. It's been 6 years since I've attempted off the floor trading. Some of the problems I encountered were bad fills and dead time between making a buying or selling decision, calling my order in, and the actual execution of the order. I'm wondering if anyone can tell me if things have changed in the last 6 years. I would think with the advancements of computers, the Internet, etc. there is now less of an advantage to being on the floor itself.

Does anyone here successfully trade off the floor? Back then, I think it was almost impossible to overcome the disadvantages of being off the floor. I'd love to hear comments from anyone successfully doing this. Thanks.

02-24-2002, 03:11 PM
This illusion, that the reason you can't make money trading is because of slow fills and so forth, plays a lot of novices for suckers. They start out at Schwab, lose some money, go to E*Trade, lose more money, go to Datek, lose more money, finally go to on of these in-house direct-access places where you just can't get any faster, and then give up. It is always tempting to say "if x, I could have made money," and slow executions open a lot of random if components.

It is true that the fastest guy on the block, with the latest equipment, can pick a couple people off here and there. I have worked with both the first off-floor guy to do this (HH - the Godfather,) and the best (JT). Experience proves you could literally have made a million dollars from your house in 1999 with maybe $20,000 to start with. But just getting to where it is possible with the right equipment, and actually learning how to do it, are two quite different things.

Moreover, not being able to trade fast enough to take advantage of a specific style, and simply not knowing how to trade are two different things. When I sold the high tick, and bought the low tick in the S&P futures two days in a row - note that the second day was limit down on an Intel earnings surprise, making my odds against like 4 million to 1 - I did it giving limit orders to a broker by word of mouth, and then having him call an order desk in New York, (and the first day I did it without even using live quotes, just watching CNBC, and applying memory of all the relative prices in recent days, plus that cash/premium ticker that slides along the bottom)!

Like any other skill, you can learn to trade from off-floor, in about 1/1000th the time you could figure it out yourself, by copying someone. So you should really try to get in on an office or an upstairs desk of people doing what you can do. If no such desk exists, chances are that proves that what you hope to do will be very difficult. The most readily-available, copy-able body of applicable trading knowledge falls under the general religion known as "trend trading." I have posted a great deal about it here on this forum, though for less advanced stuff, you might try teachtrade.com or dacharts.com (paltalk e-mini chat room).

So far as floor traders having lost their advantage, here is a post I wrote on that a while back:


So far as why you would want to do this, as compared to any other way of making a living, I suspect it is because, together with not having any idea how little you can make, you also have no idea how much you can make. To answer that question, I'll quote a very wise futures broker I used to work with - "It's never as good as you hope, it's never as bad as you fear." Or maybe he said something like "it's never as good as you think it's going to be, it's never as bad as you think it's going to be."

There is no chance fortune hiding in futures, you will not get lucky. But, if you copy, neither will you go broke. Just apply the same rules you would apply to anything else people do for a living to guess how much you can make.


02-25-2002, 05:27 PM

Thanks a lot for the help. I'm under no dillusions. My past failure to profit from the futures market off the floor were undoubtedly due to my lack of expertise than they were to poor fills. It's just that I honestly don't know of anyone who has or is making a living from off the floor day trading the futures markets.

When day trading (as opposed to position trading), fills are an extremely importatnt factor. I had a friend who had a seat and used to trade SP 500 futures from the floor. He used to tell me and at times you could actually witness these floor traders take the market down at the opening bell, fill out all the stops and take it back up again. There was much profit to be made if you were "in" on this and had a seat on the floor. There are also other ways to profit as a broker when you have orders in your hand or know the orders the guy next to you has in his hand.

But I've also heard that these advantages are becoming less and less with new technology and as more and more people trade off the floor.

Again, I'm not saying that experience and know-how are not the most important factors in successful trading. My question was is it possible to successfully profit from off the floor "DAY" trading as opposed to position trading. Thanks alot eLROY for the helpful response.

02-25-2002, 06:22 PM
Well, I don't deny that I once laughed when a boutique CME floor broker told me he had customers who could make money other than me. But I was young and clueless.

The bonds are probably hopeless, but I know of a couple people who make money day-trading S&P's and Naz's from off floor, all trend traders, some counter-trend thrown in, about evenly split between mechanical and discretionary.

And that is a couple of people out of about 10 million who have tried. And the anomalies supporting their methodologies could - and do -change like the weather on any day. Pretty precarious.


02-26-2002, 10:28 AM
If you trade enough you should be able to call

the floor directly get the bid ask and not worry

about bad fills.

02-26-2002, 10:30 AM