Jun 30, 2005

My experience on the NYMEX

So yesterday I was down in the city to meet a friend who works on the floor of the NY Mercantile Exchange. Now for those of you who don't know what it is, the NYMEX is the worldwide center of commidities trading - when you hear on the news that crude oil is up above $60, it's because someone sold a barrel of oil for $60 - and that barrel is usually sold at the NYMEX.

Still don't recognize it? Ok, think back to Trading Places. Yeah, Eddie Murphy and Dan Akroyd. Remember at the climax they were writing tons of tickets, putting the Dukes out of business in the frozen concentrated orange juice pit? That was at the NYMEX. And it still runs pretty much the same way as it did in 1983 when the movie was realeased - a bunch of grown men in a pit yelling at each other.

And that's where I was yesterday. My friend got Alex and I down onto the floor of the exchange and he gave us the nickel tour on how things worked down there. He has worked there for 27 years and could actually have been an extra in Trading Places had he not already had plans that weekend. They filmed that scene on-location and used real exchange employees as extras.

A couple of things to note:
1. Yes, believe it or not, there really is a pit for frozen concentrated orange juice.
2. Yes, being a broker on that exchange is a brutal, high-stress, high-intensity job.

Now my friend works in natural gas - which is the pit right next to crude oil. Now this is just an educated guess, but I'd say that of all the commodities on the exchange: cotton, corn, sugar, coffee, grain, etc., crude oil is probably the one that gets the most press, followed by natural gas. This is especially true the day before I got there, as it sold for the first time at $60 a barrel. When I got there, oil was selling for about $57, and my friend said it had quieted down significantly since yesterday. I walked over to the crude oil pit, took a footprint the size of a small house, and saw what looked to me like utter pandemonium. It would be neat to see it when it was busy.

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