Why Are Traders Still Shouting in 2025?

Even in the age of algorithms and lightning-fast electronic trades, some deals are still made the old-fashioned way — by shouting across the pit. Join us live from the floor as we uncover why open outcry trading isn’t just surviving…it’s thriving.

AUDIO PLACEHOLDER

Summary – IBKR Podcasts Ep. 252

The following is a summary of a live audio recording and may contain errors in spelling or grammar. Although IBKR has edited for clarity no material changes have been made.

Jeff Praissman 

Hi everyone. This is Jeff Praissman with the Interactive Brokers Podcast, and it’s my pleasure to welcome today Scott Bauer from Prosper Trading Academy. Hey Scott, how are you? 

Scott Bauer 

Jeff, I am great, and thank you so much for having me. It’s great to be down here, live on the floor. 

Jeff Praissman 

My pleasure. And for our listeners, Scott is a former market maker on the SIBO options pit. Before turning on—Scott is a former market maker on the SIBO options pit before turning to becoming a trading educator and CEO of Prosper Trading Academy. Scott, can you tell us what we’re seeing in the background there? 
It looks like you’re broadcasting live from SIBO’s new open outcry pit for SPX options. What’s behind that initiative? 

Scott Bauer 

Yes. So this is the S&P 500 options pit. I’ll move outta the way—here it is. Live, open outcry, just like we used to do it, Jeff. And you did it too. And you know what? It is robust. There is a ton of volume, ton of liquidity. And this is what people want to see—open outcry. And what it really does is it allows for orders to really go through price discovery. 
So rather than just trading electronically—where a retail trader may just sell on a bid, buy on an offer, maybe you’re in between a market—here, it is literally an auction market. It is literally an open outcry market. And that is the best way to get real price discovery. 

Jeff Praissman 

And Scott, I was a former trader on the Philadelphia Stock Exchange, or Philly as it’s known. It’s really refreshing to see a bustling, open outcry pit—because, as we both know, electronic trading has been really the trend for the past few decades. So why did the SIBO seemingly kind of take a regressive step almost for this open outcry? Or is there something exceptional about this S&P 500 pit? 

Scott Bauer 

Well, it certainly complimented what is going on in the electronic world that everybody transformed to over the last 15, 20 years or so. And again, the markets have gotten so large—and I’m not just talking about the size of the dollar value of the S&P or the Dow or the Nasdaq—but the markets have gotten so large in terms of trade and interconnectivity among markets throughout the world, that having an open outcry pit like this—where especially big institutional orders can come in, and they may want to move five, ten thousand contracts at a time—they are going to get the best available pricing that there is. 

Jeff Praissman 

Scott, are there other pits at the SIBO or is it just SPX? 

Scott Bauer 

It is not just SPX. So—can’t see it right here—but just to about my 11 o’clock over here is the VIX pit, and that is the volatility index. Everybody’s looking at that. You see it on TV everywhere—where, you know, retail investors might look at that as the VIX being the fear index—well, there is a real VIX options pit that trades over here. There’s also the Russell pit which trades here. 
SPX and VIX—really they’re the two flagships here at the SIBO. But you know what? Trading is robust. It is live. 

Jeff Praissman 

And especially VIX—if people haven’t heard of it before the last couple weeks with the tariff talk, they’ve certainly heard of the VIX now. 

Scott Bauer 

No doubt about that. 

Jeff Praissman 

Could you see other open outcry pits making a comeback—besides Russell, SPX, and VIX? Or are they really kind of more uniquely suited just for this kind of hybrid model where you have open outcry, while the electronic trading may be more efficient for the majority? 

Scott Bauer 

I would never say never. I think it’ll be difficult for individual equities to come back. 
When we traded—when you traded on the Philly and I traded here on the SIBO—before my time actually trading in this pit, I traded in individual equity pits. Amazon, Coca-Cola, Bank of America, stocks like that. IBM. 
I don’t think that’s going to come back to open outcry, but if there are other big indices, I can absolutely see some open outcry with that because, again, at the end of the day, people in the marketplace—they want to find price discovery. They want to know that they are getting the best possible pricing out there—not necessarily having to sell on a bid, buy on an offer. So if the volume is there and the liquidity is there, I could absolutely see this expanding. 

Jeff Praissman 

And I’m looking behind you and I’m thinking about my days in the ’90s, and I kinda want to ask you how this compares to those pits of the ’90s. I mean, it looks so, so much more organized—and quite honestly, cleaner than what I remember from my days on the— 

Scott Bauer 

Oh yes. Oh yeah. Back in the day, Jeff—and I was right there with you—it was paper all over the place, right? There was really no regard for your surroundings. 
And as this pit—as this new SIBO—was built back up, it was built with technology in mind. So when I traded in the S&P 500 pit back on the old floor, we didn’t have these nice stanchions, these nice stations that everybody has now where you can put your laptop or put your handheld device. 
Because for a long time, we didn’t even have handheld devices. 

Jeff Praissman 

I— 

Scott Bauer 

We traded with paper charts. Well, we traded with paper. 
But this is really all about efficiency so that the market makers—the locals here—can be more comfortable. Because as things get really rocking at times, right? You want to make sure that the people that are involved here have every tool at their dispense to make the right decisions. 
And quite frankly, to just get the best prices out to the public. 

Jeff Praissman 

And our listeners love trading stories. So are there any kind of stories you’d like to share—or can share—from— 

Scott Bauer 

Oh well, there’s a bunch. I mean, back in the day, we were not allowed to bring food or beverages down to the floor. That was a no-no. 
And there would be market officials that, if they caught you with something, you would get a fine. And they were pretty heavy fines. Well, I was always of the mindset that I had a way—maybe running off the floor to grab a sandwich or grab a coffee or something—versus trying to sneak it in, stay in the pit, and not miss the next order. 
You never knew when that next order was gonna make or break your day, your week, whatever it was. 
So, I was definitely known to accumulate many thousands of dollars of fines over my lifespan on the floor. But you know what? In hindsight, I look back and say, “Boy, what a great investment,” because I did not want to miss that trade. 

One other big one—and this was back towards the late ’90s—when the Nasdaq really started coming alive and some of the dot-com stocks started coming alive. 

Scott Bauer 

And most traders, at least on the SIBO floor, did not wanna make that transition from trading a Coca-Cola and IBM—something that, volatility was very well known—into trading some of these higher volatile stocks. 
So when Amazon.com options were listed back in the late ’90s, there was a call from market officials on the floor for a market maker to go over and trade in Amazon.com options. And I literally—out of the hundreds and hundreds of active SIBO floor traders at the time—I was literally the only one that went over. 

And so for a period of about three months or so, I was literally the only market maker in the world trading Amazon.com options. 

Jeff Praissman 

That’s amazing, considering how many—Amazon’s consistently one of the top 10 volume options, month after month, week after week, year after year. 
So that’s actually incredible to think that there was a time where traders and market makers would shy away from it, right? 

Scott Bauer 

Exactly. And not embrace that volatility. And again, it was all a mindset of—you’re used to something trading in a very defined range, like some of these older stocks that, you know, traded kind of repeatedly. 
And this was just a new… a new initiative—really the new world of volatility—and it really didn’t trade any differently except for higher levels, wider levels. 
And I’m just—I’m really fortunate that I was around that day when the call came out and I was the one that stepped up to do that. 

Jeff Praissman 

Well, yeah, it was a good thing you weren’t getting food at that time, right? 

Scott Bauer 

Exactly right. Exactly right. 

Jeff Praissman 

You had mentioned something when you were describing the pit—you mentioned the term local. And some of our listeners may not exactly know what that term means as it regards trading. 
So could you kind of explain what a local is versus sort of like an institutional trader? And, sort of, how would you say this new SPX pit and this new VIX pit… 
What’s kind of the breakdown between, like, local and— 

Scott Bauer 

Sure, I’ll step aside here for a moment. 
So if you can see the landscape of the pit here, you see all these traders congregated together—the ones that are down below, kind of in the middle looking out—those are people that are either locals or what are known as individual market makers. 
Though there’s not many of those people left. There’s not many individuals trading their own account—at least in the S&P or even in the VIX anymore—just because the size of the markets have gotten so large. 
So very few locals. Most trade for big banks or institutional companies that are out there now, looking out. 

So these are the traders—the market makers—looking out. They’re looking at the brokers, who are standing typically on the outside of the pit. They’re the ones that have the orders. They’re presenting them to the market makers. 
And any of the market makers or locals here, you can trade with anybody else, you can trade with any broker. 
But it’s kind of difficult for someone standing right over here maybe to trade 50 yards away. You can—there are still hand signals—it gets really loud. Just like in the olden days, hand signals are still used. 

But I would say the breakdown is primarily: you have your brokers on the outside, probably 90-plus percent traders that are working for institutions or banks. 

Jeff Praissman 

And 2024 was a record year for option volumes. What’s driving the growth? 

Scott Bauer 

Well, everybody wants in, right? 
Options are a fantastic way to take a position, to hedge, to leverage other positions elsewhere. And the advent—the growth—of Zero DTEs, which is in the news quite a lot… 
These new Zero DTE options—which basically expire same day or next day—that now accounts for over 50% of the total option volume here in the SPX. 

So I’m not sure anybody—even the people here at SIBO when they launched these Zero DTEs (which stands for Zero Days to Expiration)—they thought that it would be that popular. But it obviously has been. 

And so, you know, the SIBO has always been on the forefront of bringing new products based on what do people want? What do institutions want? 
And this one really took off. And I really don’t see option volume receding whatsoever—again, because of the depth of markets, liquidity, and just the ease of being able to use something like SPX options or VIX options, whatever it might be, as a hedge against other portfolios worldwide. 

Jeff Praissman 

Yeah, I mean, Zero DTEs are—it’s really incredible how much volume they consist of. I mean, 50% is amazing. 
Do you anticipate any other innovations for options for maybe this year, or even over the next, say, 2, 3, 4 years? 

Scott Bauer 

Well, I think the big one—and maybe someone in your company might have a say in this—I think the big one people are looking for is 24/7 trading or 24/5 trading. 

That’s something that, as a market maker going way back, I always wanted. Maybe not necessarily 24—but boy, when the market closed at 3:00 PM Central Time, 4:00 PM Eastern Time, and you were trading a stock that had an earnings report coming out—you wanted the opportunity to still be able to trade that move. 

And sure, you could trade a stock in after-hours, but it’s typically not as liquid. You see bigger moves. 
So I was always a big advocate for extended trading hours—again, not necessarily round the clock (though that probably wouldn’t go well with my sleep habits if that was the case), but I do think that’s something we will see much sooner rather than later. 

Jeff Praissman 

Yeah, ’cause I mean—even just, you mentioned the equity market—and we at Interactive Brokers, we currently offer overnight trading, which kicks in 8:00 PM Eastern Time until like 3:50 AM Eastern Time. So it’s after the extended hours from the exchange. So, like, the equities have already kind of gone there. 
So I could see that being a logical kind of next— 

Scott Bauer

Exactly. Exactly. 
And you know what? There is a big ask for it from the trading community—not just from retail traders, who are not really going to drive those decisions—but I think from the big institutions that are out there as well. 

Jeff Praissman 

Oh, Scott, this was great. Are there any other final thoughts you’d like to leave our listeners with? 

Scott Bauer 

I want people that really have never seen something like this—except maybe in a movie like Trading Places that we all probably have seen and really enjoy—I want people to really understand that what goes on here is so essential to our financial system. 
And that it is safe. 

Sometimes people will look at the live markets and say, “Oh, those market makers down there, they’re doing this, they’re doing that.” 
No. These are people—upstanding people—that have to abide by very strict regulations. 

And what goes on here is really of the utmost truth and honesty. And I can’t imagine a world without it. 
I mean, at some point, maybe there will be. The big transition that we made from open outcry to electronic—everybody thought that this was gone. 
This is thriving. People should know that. 

Jeff Praissman 

No, Scott, this was great. And for everyone, this is Scott Bauer, CEO of Prosper Trading Academy. He has a lot of great contributions to our website and our educational area—webinars, other podcasts. You can Google his site, Prosper Trading Academy. 
And it’s our pleasure to have you on our podcast studio, Scott, and we’re looking forward to next time you stop by.

Scott Bauer 

Thanks so much, Jeff. Really appreciate the opportunity. 

Jeff Praissman 

Ah, great. Thank you.