End of session

I'm taking a sabbatical from the blog for a few months mostly because I'll be out of the country for an extended period of time and also so I can focus on arranging some of the hand signal information in preparation for a self published book which hopefully will be out in a year.  See ya in April...

Electronic trading cards

When pit traders thought of automated trading, one of the early concepts was to use handheld terminals rather than cardboard trading cards and although an effort was made to convert traders to using them, it didn't gain much steam.  The concept of electronic trading cards was developed shortly after the FBI sting so in 1990 the CBOT and CME began their effort to find the vendor for electronic cards.  One reason why the developement came after the FBI sting was to enhance the audit trail of trades and the FBI sting highlighted the flaws in the existing audits.

As with any sort of evolution, the push for electronic cards was a difficult one although in 1991 testing began in mock trading sessions.  The above photo is from 1996 and the caption reads that only 10 traders at the CBOT used it with regularity and at the time there was noone at the Merc who used it outside of mock trading so shortly after the effort was discontinued.

I don't know at what point the electronic card program was discontinued within the pit but it came back in different incarnations.  One thing that was pushed during the short time I clerked for a desk at the CBOT (late '99-mid 2000) was electronic order tickets from the desk to the pit broker although I forget what the name of the software/program was.  For the past decade or so, the CME has provided handheld, wireless GLOBEX access to floor traders and I think that the software is proprietary and only used for such handhelds.

Spoo pit circa 1982

The above photo is from October 1982 and shows the S&P 500 pit at the CME just months after launch of the contract earlier in the year on April 21st.  The Merc wasn't the first to launch a stock index contract and was beat by the Kansas City Board of Trade's Value Line contract by a couple months.   

FBI Operation Sourmash and Operation Hedge Clipper

In the above photo is an undercover FBI agent, can you guess who?  I'll give the answer at the bottom of the post. 

In the 1986, the FBI began an investigation into corruption in the Chicago trading pits at the urging of commodity firm Archer Daniels Midland who helped hire and train some undercover agents.  At the CBOT the codename was Operation Sour Mash and at the CME it was given the name Operation Hedge Clipper.  In January 1989 the investigation was closed as details began to leak out and the Chicago Tribune was ready to break the story which resulted in 46 traders being indicted on over 1,500 counts including, racketeering, fraud and lying to the Feds.  Once the news of the investigation broke, the FBI continued to have undercover agents work on the floor to listen to the fallout.

The NFA records of the undercover agents continue to exist under their alias at the NFA's BASIC background records which all current and former floor traders are required to be listed.

For anyone wanted to read more about this fascinating episode, I highly suggest the book Brokers, Bagmen and Moles which was put out by a couple journalists. 

For the lazy, here is a NYT article written a couple weeks after the sting was announced:
F.B.I. Commodities 'Sting': Fast Money, Secret Lives

Answer to trivia question: VOGL in the lower left corner was FBI agent Dietrich Volk, alias Peter Vogel who was given the background of being the nephew of a wealthy Uruguayan who wished to get further into commodities trading.  

there are old traders and bold traders but none w/more style

 image from wikipedia

While in LA to watch the Blackhawks and rereading Taleb's books, I had a good laugh thinking of a friend and I's discussion about our brief time working the phones on order desks at the S&P pit when we first got to the CME.  The nine months I was a desk clerk it involved talking to Japanese traders in broken English or complete a-holes in NYC, pretty much everyday was miserable and I couldn't wait to get on the other side of the phone.  My friend on the other hand got to speak w/Mr Norm Zada, most famously known as the founder of Perfect 10 magazine, but also a money manager and highly esteemed academic mind.  Supposedly some of the models would handle secretarial duties such as checking trades, etc... so my bud would have to chat w/them and to *ahem* put a face to the name, their desk got a stack of magazines sent over. 

There are a lot bigger and more successful traders but I haven't heard of anyone conducting their operation with as much style and enjoyment as Mr. Zada, especially considering he only had one down year since inception. 

*updated* trading pits in New Orleans

photo credit: www.charlesmccain.com

The New Orleans Commodities Exchange began it's short run in 1981 before moving to Chicago to become the Chicago Corn and Rice Exchange in 1983 where it was subsequently absorbed by the MidAmerican Exchange (MidAm) in 1986.  There is very little mention of the exchange but Charles McCain wrote an article in 1981 which does a great job of describing the exchange and the original copy also shows photos of the trading floor:

SOLD!  Bidding on Tomorrow At the Commodity Exchange pdf copy
if you don't have a .pdf view you can use this link as a regular text copy: link

I first learned of the exchange in 1998 as I saw it on my road map during a visit to New Orleans for Mardis Gras.  One morning to help walk off a hangover acquired on Rue Burbon, I wandered into the building named the New Orleans Board of Trade which at the time still had the exchange's wall boards noting prices of the Rice and other grain contracts.  Now the building is mostly used for events like weddings, etc... and is worth taking a peek at next time you're in NOLA although I'd imagine the wallboards are gone by now.

***********UPDATE*********
"KC" posted the following in the comments sections and it's so important it needs to get bumped up to the main page.  Thanks KC for the wonderful commentary and educating us all on the New Orleans Exchange!

"The New Orleans exchange came to Chicago a few months after they closed in NO, the open interest had become dominated by Merril Lynch and Merril was critical in shutting the doors and settling contracts. I don't think that the Gulf delivery soybeans and corn made the move but the rice and cotton contracts did. The cotton contract traded briefly under two different contracts but was never successful. The exchange (really just the rice market) traded on the Mid-Am floor as the Chicago Rice and Cotton Exchange, initially on the Mid-Am floor on the 2nd floor of the Insurance Exchange Building just west of the CBOT Building and then on the Mid-Am floor in the old CME at Jackson and the river before the rice moved to the CBOT ag floor where it shared a pit with wheat options and corn options where the current corn option pit now stands. At that time the Mid-Am moved to the current out trade room on the CME/CBOT floor, which was before the Mid-Am moved to the old bond room and then to its current place on the grain floor.

The cotton contract never took hold, it was a longer staple cotton than what is traded in NY, I recall that they had problems with delivery, which was also a problem in the rice market. Rice originally had a delivery area that stretched from Arkansas to Texas, it was later restricted to the counties around Stuttgart, Arkansas. The larger delivery increased basis risk.

A number of the old New Orleans exchange seats were originally sold to Chicago grain traders due to the Gulf delivery mechanism and frankly, the lure of New Orleans as a business destination and there is still one member on the grain room floor who came from the New Orleans exchange and is likely in that photo. KC"

Another hilarious video

This video falls outside the blogs mandate of "trading pit history" but it's so funny and the 255 views it has so far doesn't do it comedic justice.  A couple things to know before watching, it pokes fun of the trading arcade scene in Gibraltar and gets the characters pretty accurately according to a friend of a friend who traded there in an arcade.  "Brass" is British slang for prostitute so to understand it makes it funnier before watching.

old BM&F floor in Sao Paulo

Image from estado.com.br

Over the past few days I was in Brazil and noticed that even though the BM&F trading floor closed in mid 2009, it remains intact as a backdrop for financial newscasts.  Because it's in the unattractive downtown of Sao Paulo, I can't imagine it getting occupied by a large trading firm like in many other cities or even turned into a gym like floors in Chicago (old CME) or Singapore (former SIMEX) were made into so my belief is that they don't have anything else to use it for and just leave it as is. 

The above photo dating from 2008 shows one of the most active pits at BM&F and as I previously mentioned, there were zero women working on the trading floor that I ever observed from a few trips there.  Yellow badges are brokers and blue badges are for locals so as you can see it's not a local dominated pit like every other exchange generally has.  Because of this, I always got the impression that the BM&F pits were more 'foot solider' oriented than others and those making decisions could use the wireless handsets directly into the floor broker's ear.  A friend of a friend used to work on that floor so hopefully I can learn whatever handsignals were used there. 

Some friends who trade SPs from Rio (nice gig, eh?) let me know after a recent skid of hard luck what SP really stands for, "super pica" which in Portuguese translates to "big cock."  Cutural differences aside, traders are pretty much the same anywhere and speak the same language.

While on the subject of Arthur Cutten....

picture from wikipedia cause I'm too lazy to walk a few blocks to take it myself

Beside the CBOT building currently are two statues representing Industry and Agriculture which once graced above the entrance to the prior CBOT building.  When the previous CBOT building was torn down, the statues (somehow) became property of Arthur Cutten on his suburban estate which eventually became the Hidden Lake Forest Preserve after Cutten's death.  The statues eventually were recovered in the past decade and were moved back to the CBOT location. 

There aren't a lot of superstitions or routines that I believe in but one thing I always do is touch the cornucopia on the statue of Agriculture whenever I walk by as a reminder of the potential bounty the markets have to offer.  The statue pictured above is similar the Goddess Fortuna who is shown with a cornucopia in one hand but a rudder in the other.  If there is a mythical Goddess for traders to think of, Fortuna is certainly the most fitting:

photo credit

"She was to be found on the back of many Roman coins, holding a cornucopia in one hand and a rudder in the other.  She was beautiful and usually wore a light tunic and a coy smile.  Her name was Fortune.  She had originated as a fertility goddess, the firstborn of Jupiter, and was honored with a festival on the 25th of May and with temples throughout Italy, visited by the barren and farmers in search of rain.  But gradually her remit had widened, she had become associated with money, advancement, love and health.  The cornucopia was a symbol of her power to bestow favours, the rudder a symbol of her more sinister power to change destinies.  She could scatter gifts, then with terrifying speed shift the rudder's course, maintaining an imperturbable smile as she watched us choke to death on a fishbone or disappear in a landslide." 

- Alain de Botton The Consolations of Philosophy

Arthur Cutten and the beginning of position limits

Prior to the crash of 1929, there were few if any speculators who swung a larger line at the CBOT than Arthur Cutten.  Like many young men from the Midwest, Cutten made his way to Chicago and apprenticed at the CBOT under a broker before striking out on his own to become a self capitalized trader at the exchange.  Within a couple decades, Cutten would amass large enough trading positions to become well known and an influential market force to the point that the U.S. Government took action to reduce the influence of such large traders.  In 1936 the U.S. legislature passed the Commodities Exchange Act which instilled speculative position limits in the futures markets and those remain today. 

As a smaller trader who tries to stay hedged and not to get in over his head, I've always looked upon exceptionally large traders with wonderment.  Psychologically the largest traders have a risk appetite which is tough to explain as they continue to do things bigger and bigger, rarely leaving at the top.  Cutten lost a substantial part of his fortune in the crash of 1929 but was able to live a comfortable life until his death in 1936.

CBOT old financial room

Pictured in the photo I purchased above (no photographer credited) is the old CBOT financial room which is also the original trading room at the CBOT.  When the grains moved to their current trading floor in 1982, the financials were able to occupy the entire room and remained trading there until the construction of the new CBOT financial floor in 1997.  After the move to the new floor in 1997, this room became occupied by the Mid American Exchange (MidAm) and after the MidAm was closed in 2001, it was leased out as it currently is today by options trading firm Peak6 and the room is prominently displayed on the homepage of their website.  As usual, click on the photo to enlarge for detail. 

MATIF signals

During my Paris visit, Mr. Fabien Danis was kind enough to spend a couple hours with me to go over the signals from his time in the trading pits of MATIF and his badge is pictured above.  He worked with FIMAT which is the trading arm of French bank Societe General and the name FIMAT was derived simply by spelling the name of the exchange, MATIF, backwards.  Sometime in the next week or two, photos of the signals should be shot and put up on the website once some backend tech stuff is also done to setup a new gallery.

Badges

A lot of people would ask what my badge PNOY means and it's short for Pinoy as I'm part Filipino like my man Manny Pacquiao in the above video.  Every exchange has different acronyms such as KCBOT is limited to 1 or 2 letters, CBOT up to 3 letters, CME is generally 2-4 letters but I've seen older members with 5 or 6 letters.

Originally I wanted to use SLIM but SLI was taken by a big S&P trader and if someone had the first 3 letters, another couldn't be added on for a new badge.  One hilarious badge I wish I took that someone else had is DUDE and another funny one I saw was some Mexican guy whose badge was TACO.  A lot of people used initials but to see humor and individuality was all part of the trading pits.

Conversation with a local

I need a laugh after getting disemboweled by the market lately, it seems like every local has had the same back and forth so it was great that someone created the above video.  My wife was laughing harder than I was when she heard it because it's the exact same scenario when I met anyone of her friends or family. 

CME alumni

 picture from australianfauna.com

There's been a handful of people from CME trading pits who went on to larger fame, perhaps most notably Mr Skin, but CME alumni also includes noted author Nassim Taleb who was registered as a floor trader for just under two years from 1991 to 1993.  Most colleagues from the floor weren't around during his time or were in other pits but I came across a funny comment on what he was like trading down there, although it's accuracy can't be vouched for.  (I'm going to Lebanon in a week so was thinking of Taleb's books)

I like Taleb's basic theories but mostly because he thinks everyone else is completely full of shit.  Others might simply call it skepticism but that's too soft of a term.  If there's one characteristic amongst the good traders I've encountered is that they think everyone else is completely full of shit.  No doubt there's people who think I'm full of shit and that's great because I think you're full of shit as well.  Somewhere in the reptilian brain, this characteristic has evolved to allow people to survive the markets because well...with rare exceptions everyone is completely full of shit, particularly in the financial industry.  My belief is such an attitude is necessary to match wits against other participants and take the other side of trades to the point which the longer one trades, the more it's reinforced. 

U.S. Marines in the trading pits

The US Marine Corps will be celebrating their 235th anniversary in a week on November 10th and all Americans owe a debt of gratitude to their service.  I'm honored to have cousins who are Marines and if given another lifetime would like to become one myself.  It is humbling that the Marines could learn stuff from pit traders as they partnered with NYMEX in the 1990s on exercises to learn of functioning under stress and decision making.  A few articles linked below outline some findings:



Virtual Stress By Capt. Mike Snyder

Cultivating Intuitive Decisionmaking by Gen. Charles Krulak

War in the Pits by F.J. West Jr.

Exchange membership vs. Taxi medallion

 picture from freefoto.com

An illustrative comparison between memberships at the Chicago Mercantile Exhcange and Chicago Taxi medallions.  For ease, the comparisons listed are between a full CME B-1 membership which allows trading in any pit, member margin rates and the lowest member fee rates in any legacy CME products.  The CME B-1 membership is the highest priced membership at the CME Group by almost double the cost of other memberships.

CME B-1 last trade: $560,000
Chicago Taxi Medallion last sale: $182,000

Number of CME B-1s: 625
Number of Chicago Taxi Medallions outstanding: 6,726 (this is recent as of link but varies slightly upward)

Monthly lease cost of CME B-1s newest leases: $1850/month
Monthly lease cost of Chicago Taxi: $2000/month approximately from $500/week drivers tell me

Income for CME B-1 user: varies
Income for Chicago Taxi driver according to U of I survey: $4.38/hour

Granted there are other details which aren't touched upon but it's clear that stacked side by side, it would seem that more economic opportunity lies in a Chicago Taxi Medallion than a CME B-1 membership which is pretty sad.  I have a lot of reasons why the CME B-1 and other seats are lacking, mostly because of what I believe is a coordinated devaluation by the exchange management.  The pit is pretty much dead so this shouldn't be seen as a ode to that but the memberships are still important in the electronic market and ought to be valued higher.  A more accurate comparison would be between a CME B-3 (IOM) membership which trades closer to that of a medallion but the result is just as stark. 

Trading floor order entry terminology on LIFFE

I just got back from London and while there, picked up this guide from a former LIFFE clerk which was put out by JP Morgan for it's customers and floor staff on the proper terminology of orders on the LIFFE floor.  Enormous errors were always possible with order entry and execution so it was important to make as few mistakes as possible and these guidelines would help eliminate such errors.  To read the text, you'll have to click on the pictures to enlarge. 

Lumber futures opening

Lumber futures opened on October 1, 1969 and rather than use a bell to open trading, trading began once the artificial tree was chopped down by lumberjack and hit the ground.  One thing that seems to be consistent from the contract launch is that noone under the age of 40 trades it. 

Bookshelf

I've been meaning to do a long post on books regarding trading pit history but I really don't have the time and since I feel guilty for being a infrequent blogger, just decided to take snapshots of my main trading bookshelf.  Most of the books are regarding the history of trading in the pits, the exchanges, contracts, etc.... but some are on the shelf and shouldn't be but I didn't bother to move them.  Just because a book is on there doesn't mean I like it or thought it was good, just that I picked it up and to be honest I can't recall anything in any of those books making me profits trading.  Anyways, if you're looking to read up on the history of the trading pits, this is a good trailhead to find books you might've overlooked.  To enlarge the photos, click on them.

Vive La France

I've managed to get all of the MATIF (Paris Bourse) hand signals recently and once the rare confluence of free time, motivation and sobriety all fall in line for me I'll post them up.  The funniest which highlights the cultural differences between France and the rest of the world for example is the signal for Goldman Sachs which elsewhere is indicated by the thumb pointing to the where a wedding band is worn on the ring finger.  On the MATIF floor, Goldman Sachs in indicated by two musical things, either mimicing playing a saxophone (Sachs sounds similar to sax) or playing a guitar as the second best selling musician in France is Jean-Jacques Goldman.

High school trading

PND Trading Project from charlie roy on Vimeo.

A former CBOT guy and current principal of a high school in Peoria was kind enough to share the above clip of a mock trading program his school developed to teach students the role of futures, hedging and the markets.  As Peoria is in the heart of the grain belt, it's a wonderful way for students to get practical experience in something so important.  As with all education, the most important thing is for the students to want to learn and he found a  way to do exactly that!

 From watching the video, I thought the kids did a great job and seemed a lot more comfortable doing mock trading compared to adults.  One funny thing I remember from watching some mock trading sessions at KCBT and CME is that they usually mix in professionals amongst the amateurs and often the amateurs will offer below or bid above the market so the pros do a quick arb to put things back in line. 

A Kid From The Windy City

One recent book that was published locally is A Kid From The Windy City by Lee Stern who is the longest serving member of the Chicago Board of Trade at over 60 years.  The book focuses a lot on his personal life experiences growing up and at the CBOT along with ownership in a couple sports franchises, the Chicago Sting of the NASL and the Chicago White Sox.  It's a very easy read and a good retrospective of a man from the CBOT who has succeeded in many endeavors. 

Handsignals of the New York Trading Pits

 The newest edition to the tradingpithistory print series is "Hand Signals of the New York Trading Pits" by Mike Nudelman and will be printed up soon in Chicago by Dan Grzeca.  All the handsignals were based upon those used at the NYMEX and was developed w/the assistance of an options trader who is currently on the trading floor.  It will be listed in the shop soon for preorders although printing will be a little bit into the future. 

 

My Word Is My Bond

My Word Is My Bond was published over a couple years ago and presents an oral history of 21 participants at the CBOT.  It's a unique piece of reading which covers much of the history and development of the exchange through the perspective of various participants.  I was disappointed that almost all of those interviewed had links to brokerages or the exchange bureaucracy rather than what I consider to be the apex of the trading industry which is the independent speculator (local) whose earnings are solely reliant upon their trading rather than customer fees.  The book was published w/the cooperation of the CBOT so nothing too outrageous is discussed.

A DVD was also created alongside the book and the opening scenes is linked below:

NYMEX light sweet crude opening trading day

Here is a piece of memorabilia from the opening day of NYMEX's light sweet crude oil futures which is the most successful energy contract that's ever been listed.  On March 30, 1983 trading began and it seems that NYC Mayor Ed Koch rang the opening bell and in the second photo he autographed the program.

Drexel Burnham Lambert order ticket

 

Above is an order ticket from Drexel Burnham Lambert which came from one of their fixed income futures desks at the CBOT in the 1980s.  For dramatic effect, I took the scan and went into Paint to illustrate on what it'd look like once marked up.  In my example it's an order to buy 200 USZ (December 30year bonds) at a price of 99 31/32.  The executing broker is OPP and the counterparty is ABC who was filling the order for house 350 (Goldman) at 7:30am.  Above the order is a timestamp which always had to be done as an order went in.  Not bad, eh???  There is the top copy and then three duplicate carbon copies in back. 

Short break

As I'll be headed to London shortly to visit the grave of my hero of all heroes, Sir Richard F. Burton, it's a good time to take a couple week break and come back w/new improvements and ideas for the blog and hand signal project.  Burton did a great deal to inspire the trading pit history project as I've read through most of his writings and am continually impressed with the detail of which he documented observations w/new cultures during his extensive travels.  It's my aim to channel some of Burton's talents to take this project to the next level by reflecting upon what he has accomplished.

Just as impressive as Burton are some enthusiast's websites which provide wonderful ideas to present education and knowledge sharing on any project.

The most extensive book on Burton took it's title in part from an Alexander Pope poem which certainly applies to Burton and just as easily applies to the trading mentors I've been fortunate to learn from:

....with pleasures too refined to please,
With too much spirit to be e'er at ease,
With too much quickness ever to be taught,
With too much thinking to have common thought:
You purchase pain with all that joy can give,
And die of nothing but a rage to live

For anyone who is interested in learning more about Burton, I'd suggest to read The Devil Drives as a good introduction.
 

Eurodollar option opening

Pictured above is another photo purchased from the SunTimes archive which was taken at the launch of the eurodollar options contract at the CME.  Given the honor of ringing the opening bell was George Stigler who is a Nobel Prize winning economist at the University of Chicago.

Eurodollar futures are one of the most actively traded futures contracts but most people don't know the history of their development.  Wikipedia does a nice job explaining how it was a Soviet bank in the 1950s which began the market and you can read about it by clicking here: http://en.wikipedia.org/wiki/Eurodollar 

Handsignals of the Singapore Trading Pits print

Soon to be off to Dan Grzeca for printing is the newest addition to the trading pit history print collection, Hand Signals of the Singapore Trading pits by Mike Nudelman. The Singapore print is based upon handsignals used on the SIMEX floor, renamed SGX, which closed in 2006. Dimensions of this print are the same as the Chicago print at 18" x 24" on heavy stock paper, numbered and signed by the illustrator and we're expecting a run in the 200 range, priced the same at $100/each. They should be available for preorder through the shop shortly but shipping time will be about a month off.

The NY and London prints are also very close to completion and like every print will feature a different color and face. The only female face is featured on the Singapore print because my primary floor broker on SIMEX was a woman.

MATIF hand signal video

Formation MATIF
envoyé par bhaouari. - Regardez plus de films, séries et bandes annonces.

I'm in Paris and will try my damnedest to pick up some handsignals from MATIF whilst here. Above is a video which explains the hand signals and for the first time in my life, I'm regretting skipping so much school because dropping out of French in my sophomore year of high school is hurting now although I understand most of it. I hope to get the video translated to share some insights but the hand signals look very similar to those used on other trading floors, specifically the CBOT. The reason why the CBOT was the basis was hand signals is because MATIF got started with the guidance of the CBOT and I've corresponded w/the gentleman who helped develop signals for MATIF. As for brokerage houses he could only remember a couple, Societe General was a salute ("salute the general") and Credit Lyonnais was a lion claw as (Lyon sounds similar to lion). Not suprisingly the video doesn't list brokerage signals.

Intermarket magazine on function of trading pit

OK so I claimed that I wouldn't share anything from Intermarket magazine but a nice email from a gentleman yesterday where he mentioned how this website helped him understand what his dad did at the CBOT prompted me to upload the following articles. In the first two issues of Intermarket in 1984 a floor trader, using a pen name, wrote two articles on the function of the trading pit. Rather than breed confusion w/my commentary on it, I'll just say it's pretty close but I have a difference of opinion on some details. So this is the only thing I'll upload from Intermarket as I know that I can't distribute the interviews which appeared in the magazine.


Inter Market Floor

Leo Melamed early photo

Leo Melamed is certainly the most photographed participant in the history of the futures industry and below is a photograph I purchased from the archives of the SunTimes. I do believe that it is from his earliest media exposure as it is from a 1967 SunTimes article on Leo and which is the earliest listed story on his website.

Unveiling the Mystery of Trading Hand Gestures

Although I'm unaffiliated with them, I recently wrote an article for the newsletter of the National Introducing Brokers Association regarding the history and use of trading floor hand signals. The article provides a condensed (1000 words) overview on that particular functionality of the trading pits and it is linked below:
Unveiling the Mystery of Trading Hand Gestures

Hitler 'stashe

As I'm in Germany, this is a good time to take a break from my substantial activity in the local market to write a bit more on the Deutsche Bank handsignal used on many trading floors.

I've been told by a floor veteran that the Hitler's 'stache signal initially was used to indicate Dean Witter in the gold pit at the CME in the early 1980's because the desk manager for that brokerage was very difficult and was referred to as a Nazi. Eventually that signal became associated with Deutsche Bank but I don't know when/how that transition was made. The handsignal for Dean Witter eventually was mimicing being on the phone in reference to one of their marketing slogans.

As for the use associated with Deutsche Bank, the signal was certainly "unofficial" (not officially designated by the exchange) and used because someone on the floor started to indicate that firm w/the signal so it stuck. At the CME, it was the index and middle fingers held horizontally beneath the nose but evolved into just the index finger horizontally and a downward scratch motion as if Hitler was scratching his 'stache. LIFFE consistently had the two horizontal fingers from what I've been told. I've seen some use the same fingers vertically which is a more accurate representation of the mustache but it might be confusing with a quantity of 1 or such and thus wasn't widely accepted/used.

So why was this signal even used? The "official" designation for firms was to signal the three digit firm number, Deutsche Bank for example was 092 at the CME. Thus, it was a much short and efficient way to signal a memorable, albeit politically incorrect, hand signal than to indicate four signals, a house to indicate brokerage house and then the numbers 0, 9, and 2.

Could something else been used rather than the Hitler signal, of course but it stuck once someone started using it. If a signal was needed today, I'd suggest things such as references to Sprockets or the TechnoViking to reflect Germany.

The other German banks such as Commerzbank or Dresdner Bank were generally not large enough players on the trading floors to have specific signals applied to them.

SIMEX floor close

Being in Singapore over the past week and reminiscing w/a former trader on SIMEX, it brought back a lot of memories for me....none good as it was a tough, illquid market for outside customers to trade. Anyways, below is a video that someone put up on youtube of the final day of the SIMEX (renamed SGX) floor in 2005 and the footage is of the Taiwan stock index pit. Further reading for those interested is a paper on Business practices of Simex locals that was published in a local management review paper. I should write the correct postscript to that paper but I won't.

CBOT 1885 building opening program

Unless proven otherwise, I have to imagine that the below copy of the CBOT 1885 building opening program is the only existing one or certainly the best preserved copy. Thus, I present it in entirety and click on each scan to enlarge:

CBOT 1885 building invitation

This CBOT 1885 building opening invitation is coupled with the program from the same.

Prior CBOT buildings

Wikipedia has a good article on the prior CBOT buildings but they don't have these photos below which I present (remember to click on them to enlarge):


In 1865, the first permanent home of the CBOT was established in the Chamber of Commerce building at LaSalle/Washington.


Because the Chicago Fire destroyed the prior building, the follow structure was built a year after the fire in 1872 at the same location.


And the predecessor to the current CBOT building began construction in 1882 and was opened in 1885.