2008 NYMEX Open Outcry - Final Round

This is the final round for the NYMEX Commodities Open Outcry Competition. Make sure to check out the homeless guy that sneaked into the competition during all the chaos.

Category:

Education

Tags:

• NYMEX
• Open
• Outcry
• final
• trading
• trade
• homeless
• commodities
• competition
• UTD
• dallas
• ut
• bauer
• school
• business

[mvparker79]

guys took up all the books and looked to see if the orders you made were valid and they also took note of people who were yelling correct trades and incorrect trades. from those pieces of information they announced winners and losers in each round until you finally had the final round of all those people who were the best in their individual rounds. then they determined from that last round who the winner was. they got a nice prize. it wasn't me though...lol

[mvparker79]

because you are having to juggle so many bits of information and LISTEN to EVERYONE at the same time. Because of this most of the time people are yelling out prices that don't make any sense like "10 barrells at 55!!!! 10 at 55!!!" when market price is at 40....no one is going to do that. the guys in the middle were actual NYMEX workers from New York and they were monitoring. As you filled your orders you put them in your little order book and at the end of the round, the NYMEX monitoring

[mvparker79]

what i want to fill "10 at 51.25!!!" something like that. then somebody in the circle will see me yelling out that order and if my order fits the requirements of one of their orders they would signal me and either try to modify the order to more acurately fit their order (ex if they only needed 5 barrels at 51.25 then they could do that and i would be left with my other 5 barrels). the price constantly shifts the entire time and it is obviously very chaotic. it is extremely difficult to do

[mvparker79]

in the circle who is trying to fill a sell order (most likely a market sell order). after that sell/buy occurs the "market price" has now shifted to 50.75 (the number of barrels of oil would also be indicated in the transaction). everyone around the circle is trying to pay attention for what the market price is at. if i hear that someone just sold at 20 barrells at 50.75 and i have an order for 10 barrels at 51 or 51.25 i would see if anyone is willing to fulfill my transaction by yelling

[mvparker79]

make the buy or sell order at WHATEVER the current market price is. there were other types of orders which indicated a price that the buyer/seller wanted to either buy or sell at.

the round starts out at a specific price which would be like the opening bell in the morning...there is already a specific price known. at that point everyone in the circle starts trying to fill their orders. If current market price is 50 and i have a market order to buy at 50.75 then i would try to find someone

[mvparker79]

Well obviously this is slightly different from the real thing but not much. The way this was done is this...everyone participating a particular round was first given i think 5 or 6 sheets of paper. the papers represented orders that would have been made by clients. they were color coded depending on the type of order (market order, limit order, etc) and they included whether or not it was a buy or sell. the red ones were market orders and basically what a market order is is you immediately

[halik007]

@rac3379 Hah, yes because algo shops put on huge one-sided positions...

[pokeguy808]

I dont' get this, how does this work?

[pipotherium]

@word2urmuva Dont the the point of pit trading either...

[word2urmuva]

More specifically, there is no informational advantage left on the floor. No "low hanging fruit". Especially given the low volumes being routed via the floor, and the absence of major players. Nymex Europe's attempt to re-introduce floor trading to London in 2006 is surely the best example of this. I'd be surprised if CME/NYMEX pits last until the end of the decade.