Maintenance

Gonna be doing some enhancements w/this site and tradingpithistory.com in the next week or so and until it's done, no new posts will go up.

Happy 18th Birthday Globex!

It was 18 years ago (next week) when Globex was launched in the cake cutting ceremony seen above. Note that it originally involved the CBOT as seen by representative executives from there but eventually the CBOT went their separate way from Globex, only to return to it over a decade later. The photo came from a SunTimes file archive that I purchased.

CBOT visitors card from 1883, 1884 and 1894

Scaned are the front and back of CBOT visitor cards issued to an agent first of the Chicago and Alton (C&A) Railroad and then with the Illinois Central Railroad. On the reverse of the first two you can see the post-Chicago fire CBOT residence which was in the Chamber of Commerce building and then on the front of the 1894 ticket you can see the subsequent CBOT building. The first two tickets are signed by Charles Randolph who was a CBOT executive dating back to 1863 and was President in 1865. Randolph was eventually made CBOT Secretary from 1869 until 1884 when it was handed over to George Stone whose signature is printed on the third card.

The Pit movie

The Pit is a new movie that looks similar to Floored but focuses on NY commodities traders and I think specifically the NYBOT. It seems to have been filmed about the same time or perhaps earlier than Floored but is yet to be distributed. Plans are for it to go to DVD and a recent inquiry revealed no Chicago viewings scheduled in the near future. Looks pretty damn good to me though!

Updates can be followed at: thepitmovie.com

MATIF pits

Some footage of the MATIF (Marche a Terme International de France) exchange in Paris. Someone even setup a MATIF Facebook page for those who read French with photos, links, videos, etc... From my understanding, the MATIF floor went away in a matter of months after electronic trading was introduced. It's too long a story to recount here the reasons how and why (it involved floor trader strikes) but it's done wonderfully elsewhere such as the book Electronic Exchanges.

Wheat corner of 1897

Limit Up the movie

1989 saw the release of the movie Limit Up which can't even be found on DVD today as only old VHS copies and a digital download from amazon is available.

Rather than summerize it in complete, here's: Robert Ebert's 2 star review

Some notes that I'll add after a recent viewing:

- The exchange focuses on the soybean market and is implied to be the CBOT but is named The Midwest Grain Exchange in the movie.

- As Roger Ebert noted, a handful of traders must've flown out to LA to work in the movie because the trading pit scenes were rather accurate with a just a couple minor exceptions. I even saw a CME badge or two in the movie amongst the faux CBOT badges.

- There is a bit of tension between the main character who is an aspiring hard working trader who sells her soul outright and another female clerk who strips for her boss. This just proves the movie is complete fiction because that would NEVER happen in real life.

- There were some Amish guys in the visitors gallery which is kinda funny because Charlie D. mentioned he used to see them up there around the same time period.

- The final trading pit scene was like Ghostbusters comes to the trading pit, that's how bizarre parts of the movie got.

- A big focus of the movie is on starvation so the main character keeps the price of beans from soaring and thus preventing world starvation.

-Soundtrack by John Tesh including a song he wrote "Soybean Shuffle"

My verdict is it's not great but not horrible although only worth watching for a trading floor enthusiast.

CBOT rogue trader

It was a low point in the history of the CBOT when the scumbag Darrell Zimmerman blew up a clearing firm in 1992 with nothing more than a bad check in his account while he tried to muscle the bond contract. It's almost defies belief that a person like him was allowed to stick around the trading floor but in actuality the floor was filled with people like him. One thing I've learned is to never deal with a desperado and it's clear in the article he went for it because he had nothing to lose. The article is pretty long and might be worth printing out to read but it's certainly worth reading.

The Chicago Reader published the following article on October 3, 1996:
Busted
A rogue trader's path from the pits to prison in 25 steps

The author is Ted C. Fishman who was a former floor trader and author of the recent release China Inc.

Chicago handsignal print

As previously mentioned, the Chicago handsignal print is finished, signed by the illustrator Mike Nudelman, and we're just waiting for a paypal cart to get setup on tradingpithistory.com before we can roll them out for sale. If anyone doesn't want to wait, contact the project at: tradingpithistory@gmail.com to reserve one of the 500 printed up.

The Big Hitters by Kevin Koy

A lot of people think of Market Wizards as the first book in it's style to have interviews with leading traders and that is incorrect because in 1986 Kevin Koy published The Big Hitters: Interviews with The World's Foremost Market Movers and the list of interviewees is:

Richard Dennis
Clayton Yeutter
Tom Willis and Bob Jenkins
Richard Sandor
David Heuwetter
Brian Monieson
Tom Baldwin
Charlie Andrews
Robert Prechter
J. Peter Steidlmayer

The Big Hitters was published by Intermarket Publishing which also published a magazine called Intermarket. If anyone has any or knows where I can find some, please let me know because I can't find them anywhere.

Kevin Koy was also the coauthor with Pete Steidlmayer of Markets and Market Logic.

Anyways, there are a limited number of copies of The Big Hitters in the $30 range still available on the internet and I figure it'll get more scarce as time goes on.

A Deal in Wheat by Frank Norris

"A Deal in Wheat" is a 1903 short story by Frank Norris, author of The Pit, which I found interesting and worth a quick read. After getting whipsawed trading, a buddy and I used to complain that the market will get ya comin' and goin' which certainly is what happens to the subject in the short story. Very quick read, about 20 widespaced pages and available if you click here.

LIFFE trading floor closes

LIFFE photo linked from BBC

In reading up a bit more about the LIFFE trading floor closing, I found the following articles which I felt were worth linking:

"The end of Liffe as we know it" from The Independent Thursday, 6 August 1998

"Bleak futures for Liffe locals as pits close" also from The Independent Sunday, 15 August 1999

A snippet from the second article gave me a good laugh cause it was the only good word I've ever heard about Chicago traders:

CBOT financial floor video June 1998

Short clip of the CBOT financial floor in June 1998, around it's heyday. Pretty amazing that it looked like that everyday. While on a roadtrip before starting at the KCBT, I stopped by the CBOT in the same month and knew upon seeing it that I needed to get to Chicago to work there and did just over a year later. The clip is 'rights managed' so I can't embed it and can only link it:

http://www.thoughtequity.com/video/clip/1B08158_0014.do

YesTrader

So I was thinking about a few things but mostly how the pit was displaced w/the various software frontends, which companies were able to survive the early competitiveness and also how Tickit did things right after the industry matured over 10 years after inception.

I was really fortunate to start my career alongside the emergence of electronic futures trading and one name stands out as a symbol of early excesses, YesTrader. Perhaps the most memorable thing about the company was that it famously took over THE best office view in Chicago, the former Merrill Lynch Pierce Fenner & Smith office at the front of the CBOT which looks straight down LaSalle. Merrill Lynch gave up the office because they shut their commodities (metals and grains) business at pretty much THE low, right before those markets started to go nuclear as noted in this article from Futures Magazine March 1, 2000: Merrill Lynch dumps commodities

Anyways, I never used YesTrader software but remember the company being noted for being bold enough to snag that prime office and also that it had former CBOT Chairman Pat Arbor on the board, ironically who also pushed for building the new gigantic CBOT financial trading floor. After 16 months in business, YesTrader filed for bankruptcy and this article explains some of the background of the trading software industry at the timein late 2001:

YesTrader forced to file for Chapter 7

I really admire anyone with the courage and conviction to start a company so YesTrader should be acknowledged as an early pioneer in electronic trading.

For a look at their company operations, I had to fire up the WayBackMachine and found an early version of YesTraders Flash based website and also the final version of the YesTrader website.

Tickit Trading Systems Profile Video

I'm a big fan of using Tickit's software to trade and wanted to post this recent video from Crain's Chicago Business on a profile of the company after they won a recent award. They asked if I'd take questions for the interview and I was happy to help out since the software really helped me. Full disclosure: I not involved in the company except as a client who still pays full price and I don't receive anything for putting their link on this website or tradingpithistory.com

Two great finds by Chris Willinghurst

The first is a lengthly 16 page article that ran in Donhue's magazine in 1907 entitled "The World's Food Exchange, Sketches of Life and Character on the Chicago Board of Trade." The article is a wonderful primer on the early legends and fuction of the CBOT.



Second submission from Chris was a NYTs article "A visit from 'Old Hutch" from June 23, 1891 on a visit Old Hutch made to NY. It's noted in there about Old Hutch's cocktail:



It took me a while to realize it but that's basically ginger ale and there are some nice unfiltered ginger ales out on the market such as such as Fresh Ginger Ginger Ale by Bruce Cost which I tried recently and is great.