When I place an order will I see any difference in speed of execution compared to electronic markets? Or will it all be transparent to me? What are fill and spread like? Obviously these may vary widely from market to market but is there a general pattern?
Are you sure IB offer pit traded contracts? they used to be electronic only, unless that has changed recently.
the speed of your fill will generally depend on your broker, etc. I did some dow trading using the floor contract a number of years back through RJO using an web based order interface (rather than the phone) and the fills would generally come back within around 5 minutes. Compared to electronic fills which will usually be around 50ms then obviously there is a BIG difference.
transparency is non-existent, unless you are actually in the pit. The price on your chart will usually be the last traded price, the market is unlikely to be bid or offered at that price. you will rarely ever really know whats going on in the pit, and if you get quoted a bid or offer over the phone, it doesnt mean you can hit it. you will be slipped massively routinely because the pit contracts are not very liquid any more and spreads are wide.
why are you thinking about trading the pit contract instead of the screen? in the S&P for example, the electronic contract does 5-10x more volume - the floor will sometimes struggle to do 50k contracts in a day, vs the screen which will often do 1million+
Another question while we are on the topic.
Could someone explain to me how the CME side-by-side markets (currencies, Nikkei etc.) work? The floor and Globex symbols are different, but are the prices the same or different? Are the floor-traded contracts different from the Globex contracts?
the prices will be similar-ish. the real liquidity will be on the screen. if there is ever any overlap, arbitrageurs will bring prices back in line almost instantly. There are people in the pits who purely do arb between pit & electronic. If you want a bid or offer that you know you can hit, you have to do that electronically.
