Futures Trading - Electronic + pit futures trading

Futures Trading: Electronic + Pit Futures Trading Welcome back. So in the last video we discussed the two types of futures traders and the role of exchanges. In this video, we’ll be talking about electronic and pit trading. For a very long time, U.S. futures exchanges have provided efficient and liquid markets through the pit, or open outcry system. By literally standing on the trading floor and providing bids and offers, brokers and traders have maintained liquidity for generations. Today, many of the U.S. markets either trade exclusively on a computer matching system, or they use a combination of electronic and open outcry trading. However, most traders focus on the electronic systems. Electronic trading offers many advantages over pit trading, including easy access from a computer, the ability to use analytical tools in your trading, rapid order execution, and the ability to trade multiple markets simultaneously. Either way, the method of matching buyers and sellers, whether it’s pit or electronic trading, doesn’t change the nature of the contracts or the markets in any way. Thanks for watching. Join us next time, when we’ll be discussing futures trading terms.