Chapter 27 Off floor Trading Market Disintegration and Price Volatility in Bid Ask Markets This study was commissioned by a futures market Exchange firm plagued by members trading off ﬂoor in strict violation of the Exchanges rules requiring transactions to be made on the Exchange ﬂoor during trading hours in the assigned trading areas. Any violation of these rules is a major offense and penalties have been and are levied on violators. Although violators are often discovered and penalized the prohibition itself assures that there exists no systematic field data from the Exchange that can help inform the circumstances that produce off ﬂoor trading. Hence experimental evidence is the only feasible source of relevant observations. Exchange officials conjectured that the bid ask spread in pit trading was sufficiently wide to provide an incentive for both parties to trade inside the spread at savings to each that justified this risk. This would be especially applicable to traders who knew each other well and each was comfortable with the trustworthiness of their trading partner.