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Economics and business major Chris McConnell ’09 (Scottsdale, Ariz.) served a summer internship with Brett Muney ’86, who works in sales and trading at Saratoga Futures in New York City.
This summer, I embarked on a 7-week summer internship with an institutional futures and options commodities brokerage. In the commodities world there are two types of brokerages involved in transmitting a client’s order. The first level of brokerage types is what is known as an introducing broker (IB), which is what Saratoga Futures is.
I worked directly under Brett Muney and Jay Leftcowiz (managing director of the trading desk and a CFA). Both are great contacts to have, Brett having gathered a great deal of trading experience from trading in the pit of the American Stock Exchange for nearly a decade and Jay who was a computer science and technical analysis guru. Working with Jay has inspired me to pursue the CFA distinction this fall. I came into the internship wanting to learn everything I could about technical analysis and discovered there is no end to the amount of knowledge on the topic.
One of my responsibilities every day was to track the open, high, low, close, change, open interest, volume, and implied volatility of corn, wheat, rough rice, crude oil (NYMEX), gold, silver, palladium, the United States Dollar Index, the Euro, and the pound. I did these for the futures contracts on the three closest front months for all these commodities. A futures contract is a specified contract to buy or sell a specified amount of commodity, stock, or index at specified expiration and at a set price. This project was called Futures Follower.
Saratoga also asked me to familiarize myself with several electronic trading platforms. In doing so, I wrote a mini-user guide that will soon be posted on the Saratoga Futures web site. This was a great experience and I acquired a multitude of knowledge on how orders are processed, transmitted, what market is used to base orders off of, and what features and setting layouts are most efficient for different trading styles.
Among numerous other things, I learned that introducing brokers are responsible for soliciting and maintaining a direct relationship with the client. The meeting, maintaining, and networking through clients is key to the business. The next level of commodities brokerages are Futures Commission Merchants (FCMs), who maintain a close relationship with introducing brokers.
As you can see, my internship at Saratoga Futures provided me with a great opportunity to gain exposure and experience to commodities trading in futures and options market. I gained an inside understanding of the dynamic brokerage-to-brokerage relationships, as well as brokerage-to-client, and how trades are cleared and executed.
I owe my wonderful opportunity to the Career Services Office and the job vault web site they use to advertise alumni and non-alumni job and internship opportunities available to students. This summer was great and I can only hope to be so lucky next summer as I take on the real world work load and life.