A War Story From My Floor Trading Days

A New Series [frep, frep header, header, logo] February 18, 2024 Welcome to a new series from Option Pit….each week one of our traders will bring a ‘war story’ from our days as a floor trader that we think is relevant to the current market. Hey Traders, This week I am going to share a story about how I began trading a specific ETF….Let me set the stage. Every 10 years or so an international market gets hot….the most notable of these was the 2014-2015 period when China was absolutely blowing up. Alibababa and other Chinese names were listed in the United States and saw valuations explode. 2006 was one of those years when international markets were exploding. China was just emerging as a trade. China Mobile was at that time exploding…this was the era of RIMM (now blackberry) and Palm.  China Mobile was the Asian version of those names. The other major player was Brazil. Remember…oil was just starting to enter into a mega trend ... investors and traders took one look at PBR and said ‘look at all of that oil they have in Brazil…look at the other natural resources. Other countries that were making news were Venezuela (Hugo Chavez was only starting to reveal who he was), Korea (samsung), and Taiwan with TSMC and other names becoming a pretty big deal. I was just switching trading firms and was trading in the best buy pit. I was trading names like Best Buy, American Air, Clear Channel Communications.  At the time I had nothing to do with ETFs. In 2006 CBOE introduced that traders on the floor could stream markets into any pit on the floor if they had a seat. Being in a pit gave me access to the open outcry orders…but I could get electronic access to any stock on the floor if I paid for it. I am sitting in my pit, and brokers would come in to trade with me. Then…they would immediately get called away to go trade one of these emerging markets. Finally I pulled aside a broker…his name was John, he was from Philly so he and I would talk about Villanova Basketball and other Philly sports (no I don't like the Eagles or Sixers but I appreciate the fans). I asked him…what is going on in that pit you keep getting called to? He told me ‘Dude…you should see the amount of orders I am starting to get in EEM and EWZ.” EEM is the emerging market ETF. It holds stocks that are from emerging markets…which to this day still includes china. EWZ is the ETF for stocks that are in Brazil…PBR, RIO, VALE. I looked at the volume and I was like ‘WOW where did that come from!” EEM was trading more than just about every other ETF except SPY. EWZ…it was outpacing DIA. I didn't know it yet, because despite being on the floor for about 5 years at the time…I was so buried in just trading I wasn't able to see the big picture. But what I was about to trade was a mini-mega trend. Seeing the volume I called the CBOE help desk and signed myself up to make markets on EEM and EWZ. Over the next 6 months the trading in EEM and EWZ was insane. The highlight of the period was when I was able to trade two separate orders in EEM off of eachother. I sold an EEM strangle and bought calls tied to stock at the exact same time and locked in close to 50,000 dollars. Not to mention the daily volume that was consistently adding 500-1500 dollars to my market making account per day. It was a mini mega trend that lasted about 6 months, but it ended up being one of the top 3 more profitable periods of my trading career. What gives us such a huge advantage at Option Pit is that we are TRADERS FIRST. Yes, we want to make our clients money…but because we are all trading our own dollars… we have a vested interest in producing dollars. This is why we are constantly testing new ideas and developing new ways to make money from emerging trends. Right now, the emerging trend is the Mega Trend from Ultra, Mega, and Large cap stocks. [I broke down everything around this new trend on Thursday… click here to watch the replay.](  Your Only Option, [sig, mark sig, signature] All the Right Options. The Option Pit Team brings more than 150 years of experience to you every day. From the trading pits of Chicago to the world's largest banks to the halls of power in DC -- they've done it all. Now they’re collectively focused on one thing: making YOU a better, more profitable trader. Click the button below to schedule a call with our concierge Customer Care Team to find your best fit today. DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk. DISCLAIMER: OPTION PIT LLC IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. Specific trading ideas or strategies discussed in the presentations or materials are entirely illustrative and do not constitute the solicitation of a transaction (or transactions) or a recommendation to execute a particular transaction or implement a particular trading strategy. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Want to change how you receive these emails? You can [Update your preferences]( This email was sent by support@optionpit.com. 1-888-872-3301 [Option Pit]( | 190 S LaSalle Suite 3000 Chicago, IL 60603 | [Privacy Policy](