Do you want to trade options using state-of-the-art technology while feeling the camaraderie and buzz of a trading floor without dealing with the bureaucracy of a large firm? (Not to mention, could you stand to make more money?)
Go to the nearest trading arcade. What is that? Elizabeth Gisch, director, globes account management, for the Chicago Mercantile Exchange, explains that a trading arcade is a place where a trader gets a seat and sophisticated trading technology, connectivity to markets, market data, analytics, clearance and settlement services, as well as reduced commissions. They trade using their own capital. Profits generally are split with the house, says one published report.
Arcades first appeared in London after Liffe, the London International Financial Futures and Options Exchange, shuttered its trading floor, Gisch says. Liffe traders wanted to salvage their livelihood and continue trading. As a result, arcades were born - a place where former Liffe traders could connect to Liffe's new electronic market. Soon, arcades began to target younger, tech-savvy traders straight from universities. The concept is growing and has caught on in the U.S., where now there are several in Chicago and two in New York City.
"Prop shops" - proprietary trading firms - are a variation of an arcade. Here, traders trade house funds and work for a package, including salary and profit split. Currently, both are for trading futures and options only.