MATIF hand signals

 Photo from dzine.be

So the MATIF handsignals are finally up  on tradingpithistory.com although they aren't complete.  I have to do a few things to fix some bugs and put up the descriptions but incomplete and up is better than waiting longer to get them perfect.  Maybe while they're incomplete you can guess the orgination of the brokerage house signals but a knowledge of the French language is necessary for some?  Enormous thanks go to Mr. Fabien Danis, former floor trader for FIMAT, for his assistance in describing and translating the MATIF handsignals.

Reader submission by Laura Scoville Ekstrom

Big thanks to Laura Scoville who was kind enough to submit a few things starting with the following CBOT buttons which starting from upper left look to be 1000oz silver contract launch, grain floor opening, gold contract launch, Ginne Mae launch, 30 year bonds launch and her AM division badge from the CBOT.  The Ginnie Mae is most appropriate as a F.I.M. (Financial Interest rate Market?) Fatale!

Laura noted that she began on the floor trading at 21 in 1978 as one of only three women and the youngest female at the CBOT trading.  She was a forth generation Scoville trader following in the footsteps of her great grandfather who founded the clearing firm Scoville & Company in 1892.  Her father, Jim Scoville, is shown below center in a photo that appeared in National Geographic.

As the silver market has gone nuclear, it's appropriate to share the some of James Scoville's poetry regarding the silver market which he helped establish at the CBOT.

Ballad of the silver pit

5000 BC when the coals cooled down,
that first man saw something nifty.
It was nothing at all, compared to the call
When Irwin bid $52.50

To those who partook of that market that shook
out all but a hardy few.
We say “here’s to the best” that laid Bunker to rest.
As we toast with our Cordon Bleu.

(James Benson Scoville)

Chicago Board of Trade Battery

I previously mentioned it but the Chicago Board of Trade once raised a military unit on behalf of the Union for the American Civil War known as the Chicago Board of Trade Battery.  It's role was best described by the blog Crossed Sabers which noted:

"It was responsible for raising several units of Illinois volunteers during the course of the Civil War. President Lincoln sent out a call on July 6, 1862 for an additional 300,000 volunteers. On the evening of the 21st, the Board decided to raise a battery of artillery. By 4 pm on July 23rd, $15,000 had been raised and 180 men volunteered for the battery. 156 of these men were selected by the mustering officer, Captain J. Christopher, and mustered into federal service on August 1st as the Chicago Board of Trade battery, Illinois Volunteers."

The above picture is of an inventory and inspection report in 1864 before the Battery was disbanded.  I didn't show an expanded view of the full report but it consisted of 56 shelter tents, 1 bugle, and 4 axes. 

While on the topic of floor traders and the military, it was recently noted that one of the primary characters in the documentary Floored, Rob Prosniewski, is now an Army combat medic in Afghanistan.  It's very cool to see that a guy from the trading pits went on to another fulfilling career as that is the exception rather than the norm. 

picture from Floored blog

CBOT 1899 member's ticket

NYMEX Potato Futures

Here is a 1960s era trading pamphlet on NYMEX potato futures, once the core contract of the exchange.  It was mentioned in The Asylum that the May contract was legendary as the primary deliver month and would have enough volatility that Chicago traders would fly to NYMEX just to trade it for a month. 

Ultimately, the potato contract was delisted w/a default and control of the potato market was wrestled by J.R. Simplot to his Idaho environs. 

As always, click on the photo to enlarge. 

Book Review: The Asylum

I approached The Asylum with a lot of skepticism but finished it quite satisfied with almost all of the near 400 pages.  To get that satisfaction though I had to dismiss a lot of the attention getting tales of lewd floor behavior and focus on all the characters who built and guided NYMEX to what it was, for better or worse.

What most people don't realize is that before NYMEX began trading energy, their dominant contract was Maine Potatoes which closed after a default in 1976.  After the Potato contract was delisted, NYMEX primarily had a platinum contract before diversifying into their energy listings first with heating oil which took a great effort to begin trading.  Once heating oil caught success, the CBOT and NYMEX competed to launch a crude oil contract simultaneously but due to problems of the CBOT's contract, NYMEX emerged the winner. 

The entire concept of listing energy futures at a time of OPEC dominance was really interesting and well explained.  It seemed that OPEC was so unconcerned w/a small entity like NYMEX that they never even tried to get in the way of preventing such a market place being established.  As could be expected, once the exchange gained prominence it also began numerous power struggles to lead the exchange through various market cycles and ultimately into their IPO then eventual purchase by CME. 

The various NYMEX characters were all intriguing, I felt equally for their accomplishments and drive as their faults and in certain cases, amorality.  It's tough for a random observer to keep the names straight as there are quite a few but I was able to follow along after reading news stories throughout the years w/some of the characters involved.  The author was a former WSJ reporter who pieced together interviews over seven years and the best part of the book was it was filled with a wide range of perspectives. 

My main faults with the book were that the perspectives were mostly brokers, those with ties to brokerages, clerks or corporate workers rather than including a lot of those who actually trade as locals.  The book also had a lot of cheap attention grabbers mostly regarding various sexcapades or mistresses sometimes w/names attached or not left to the imagination.  During the intro the author noted that some spoke to her not expected things to be published but they nonetheless made it into the book, hence a warning never to say anything to a reporter unless you can live with it being printed. 

Steve Fossett

Photo is a scan of a card I have from Fossett's firm which was used to keep position count in the pit.

There were a lot of interesting people who worked around the Chicago trading pits but Steve Fossett stood out for his amazing adventures which would always push the envelope of endurance and the human spirit.  Fossett used his earnings from his interests at the Chicago exchanges to fund an amazing lifestyle filled with travel, aviation and sailing pursuits, many of which he set world records in.  His wikipedia article linked here, does a much better job of detailing his exploits so in the interest of brevity I'll just to suggest to visit that to learn more. 


One question I have which I hope someone can answer in the comments is what did he trade and even did he trade? The reason why I ask is that the wikipedia article noted that he worked for a institutional brokerage, operated his own clearing firm and also leased exchange seats but it said nothing about him trading.   I couldn't imagine him not doing a lot of trading, especially as a successful firm was started by some partners of his so it's something likely omitted and it'd be interesting to learn more. 

CBOT Bond Pit in 1995

Here's a photo from 1995 of the 30 year bond pit in the CBOT's old financial room.  Although I never saw the old bond room while the CBOT was in there, in 1999 I did get to stand in the 30 year pit at the CBOT for a brief time w/a broker who executed some biz for the desk I worked on at the request of the Managing Director of the firm so I could see how tight the market was and how it flowed.  Although it was only about 15 minutes I got to stand and observe, it was amazing and something never to be forgotten.  Thinking of how massively large it was and completely packed w/people it's amazing in retrospect that something like it even existed.  In the photo the market is 9 bid at 0 if you were wondering. 

While on the topic of bonds, here's a 1987 NYT article describing the anticipation of the CBOT's night bonds session which opened up at 6pm each night: Chicago Girds For Night Shift