Hola, amigos. I know it's been a long time since I rapped at ya...but dull markets make it dull to post stuff here as well. Now that trading is starting to move again some ideas are starting to pop back into my head randomly.
A couple days ago while crossing the street it came to mind about how it was pretty much exactly a decade ago since I got on a seat at the CME and had my first trade in the pit. Asking others about their first trade is something I haven't done but will have to start because everyone probably has a great story to go with it, here's mine:
Before going into the eurodollar pit I had the advantage of clerking for some well established guys who were great traders and also great people with a flawless reputation. Being around the floor on the usual apprenticeship really helped as Joe Leininger wrote in Lessons From The Pit because it usually meant other traders were generally neutral to you rather than being against you as a complete unknown. For people who came in straight off the street without knowing anyone as Charlie D. did, it must've been a much harder way to start.
Another great advantage was trading off the floor to start because it helped w/knowing where spreads were already trading and added some risk management on handling my own P/L. Because I went into the pit later in the year, it was also good fortune to have a P/L cushion built through the year rather than walking in on my first day with a net liq value of 0 and not being in a position to spend on 'tuition.'
When someone gets on a badge, there's a lot of congratulations from everyone on receiving the opportunity to give it a shot because most everyone else came up the same way through the system. In retrospect there was probably equally skepticism because of the high attrition rate and also a little veiled animosity since there's now one more mouth to bite out of the pie by competing for trades. Initially people are more worried about the new guy making a mistake and hanging them on an outtrade or just getting in the way rather than being a threat to their income.
My first day on a badge I remember doing nothing and watching for the morning but then when things slowed down an Irishman named Dickey who traded for a prop firm decided he was going to get me going. Dickey asked what my market was in a certain month and slowly I replied, "uh....7 bid at 8 fifty up" and he bought 10 from me at 8. Alright I was on the board finally and reported the trade to the pit reporter before carding it up. About fifteen minutes later Dickey asked what my market was again in the same month and I replied the same because nothing was going on and he sold me 10 at 7 giving me a complete round turn and a small ($250) profit to start off in the pit.
What's a little funny about those trades is that when both trades printed, the desk brokers were going nuts asking why their orders didn't sell any 8s or buy any 7s when they traded and the pit brokers had to explain that it was only a 10 lot each time local to local. Another funny thing that comes to mind is that I remember looking at what my lease cost and wondered how the hell I was going to cover that, my monthly draw from the trading acct for income, computer expenses and also split whatever profits w/the guys who backed me. Times have changed because my seat lease back then was 3500/month for the CME divison and for that same amount a seat can be leased in all four divisions CME, IMM, IOM and GEM for a cheaper price together.
Months later when I shifted to a completely different spot in the pit where I stayed for a couple years before heading off the floor really made me realize how easy I had it by starting where I did. Immediately upon walking into the spot, a few other guys in the area started to make jokes at my expense and generally make me feel unwelcome until they realized who was backing me and then became neutral towards me. In a hostile environment, neutral is as good as it gets!