Most people don't know that pit trading is still around! I work in SPX options trading and the CBOE in Chicago still has a huge in person trading pit.
Trading Pit Hand Signals
11–20 of 28 posts
Re: Trading Pit Hand Signals
#12Most people don't know that pit trading is still around! I work in SPX options trading and the CBOE in Chicago still has a huge in person trading pit.
How has that looked over the past year? :)
Re: Trading Pit Hand Signals
#13Re: Trading Pit Hand Signals
#14This is still the best (Hollywood quality) depiction of what the trading pit looked like in reality. Trading Places, 1983: https://www.youtube.com/watch?v=RLySXTIBS3c
"Sell 30 April at 142!"
Re: Trading Pit Hand Signals
#15This is still the best (Hollywood quality) depiction of what the trading pit looked like in reality. Trading Places, 1983: https://www.youtube.com/watch?v=RLySXTIBS3c
Although that scene raises questions though: How did the two of them even get onto the trading floor (e.g. What firm were they with? How were they capital backed?). How did they have enough margin to sell that many futures short? Why was the market seemingly only open 20 minutes?
I guess the implication here is they e.g. sold 10,000 futures short, then re-purchased 10,000 futures to settle it and kept the difference. The problem is that even if you wind up with net 0 futures, you still need to hypothetically cover the short position during the trading day, or you could be violating the law (this is typically via margin, but who agreed to lend the two of them that money?).
Maybe I'm forgetting the part of the movie where they had some rich backer or approached another firm to bankroll them/get them floor access.
PS - The movie is still tons of fun, and I'd recommend it. These unclear details don't really undercut the core message, just odd as they went to pains to get a lot of things right.
Re: Trading Pit Hand Signals
#16This is still the best (Hollywood quality) depiction of what the trading pit looked like in reality. Trading Places, 1983: https://www.youtube.com/watch?v=RLySXTIBS3c
Although that scene raises questions though: How did the two of them even get onto the trading floor (e.g. What firm were they with? How were they capital backed?). How did they have enough margin to sell that many futures short? Why was the market seemingly only open 20 minutes? I guess the implication here is they e.g. sold 10,000 futures short, then re-purchased 10,000 futures to settle it and kept the difference.…
> you still need to hypothetically cover the short position during the trading day, or you could be violating the law
Selling futures short isn't fundamentally different from opening a long position. It sounds like you're confusing it with some stock market regulation. Though yes, you do need some capital to back your position, and you normally need to be a member of the exchange.
Re: Trading Pit Hand Signals
#17This is still the best (Hollywood quality) depiction of what the trading pit looked like in reality. Trading Places, 1983: https://www.youtube.com/watch?v=RLySXTIBS3c
Although that scene raises questions though: How did the two of them even get onto the trading floor (e.g. What firm were they with? How were they capital backed?). How did they have enough margin to sell that many futures short? Why was the market seemingly only open 20 minutes? I guess the implication here is they e.g. sold 10,000 futures short, then re-purchased 10,000 futures to settle it and kept the difference.…
They used the life savings of the butler and the lady of the night who took in Winthorp to fund their operation.
Re: Trading Pit Hand Signals
#18This is still the best (Hollywood quality) depiction of what the trading pit looked like in reality. Trading Places, 1983: https://www.youtube.com/watch?v=RLySXTIBS3c
Although that scene raises questions though: How did the two of them even get onto the trading floor (e.g. What firm were they with? How were they capital backed?). How did they have enough margin to sell that many futures short? Why was the market seemingly only open 20 minutes? I guess the implication here is they e.g. sold 10,000 futures short, then re-purchased 10,000 futures to settle it and kept the difference.…
The other part of the scene that doesn't make sense to me (unless I'm missing something) is when they first start shorting, it's clear that they're being mobbed by buyers, plus with the people saying "the Mortimers are trying to corner the market! let's get in on it!" it's clear that there are more buyers than sellers, so the price should keep going up. However, once they start shorting, the price starts dropping (starts at 142, then drops to 102). Does this just mean they are shorting between the two of them far more contracts than the market is buying in aggregate? The movie doesn't make this clear.
Re: Trading Pit Hand Signals
#19This is still the best (Hollywood quality) depiction of what the trading pit looked like in reality. Trading Places, 1983: https://www.youtube.com/watch?v=RLySXTIBS3c
It's so good because it was filmed on-location in the NYMEX pits before they moved out of the world trade center. Lot's of staff consulted on that part to make it accurate.
Re: Trading Pit Hand Signals
#20Most people don't know that pit trading is still around! I work in SPX options trading and the CBOE in Chicago still has a huge in person trading pit.
Why do they not close it and go full electronic? What's the point?