Stocks & Commodities V. 24:11 (66): Futures For You by Dan O’Neil INSIDE THE FUTURES WORLD Want to learn how the futures markets really work? Dan O’Neil, a principal at online futures and forex broker XPRESSTRADE (www.xpresstrade.com), responds to your questions about today’s futures markets. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C. OUT OF THE PITS I’ve heard about a couple of exchanges introducing “side-by-side” trading in some of their products. What is that? “Side-by-side” trading is the simultaneous trading of a commodity or financial futures product electronically and in the trading pit during business hours. As more exchanges introduce electronic trading, many investors are wondering whether to shift their trading from the pits to the computerized systems. While the contract specifications for products traded in the electronic and open-outcry arenas are usually identical, there are key differences. Open-outcry trading involves orders communicated to brokers in a pit via customer requests made to their brokerages via phone or computer. Customer bids and offers are matched between pit brokers, and trades are executed when prices are mutually acceptable. In electronic or screen-based trading, customers send buy/sell orders from their computers to an electronic marketplace offered by the exchange. |
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