It seems yesterday, but a decade has passed by. The floor in Chicago in 1998 seemed to me the Mecca of trading. I was appointed as a special correspondent from my Italian newspaper and CBOT and CME welcomed me as a special guest. With that same passport – special correspondent – that opens all the doors I went to visit Nymex in New York and Nybot, in those times two different entities. I spent some days on the floor talking with the Italian traders, yes, it seems that there was a kind of mafia in New York with Italian, Jew and Irish traders behaving as a compact group with that strange parlance with South Italian dialect blended with primitive English. The feeling I got was very straight: few of those traders I met on the floor had an idea about quantitative trading or good technical analysis, they were like animals that exploited the noise and the pulse of the markets. Without being on the floor they would have been lost. But I payed to them a deep respect since everybody I met was giving the impression that nothing in that place had been given for free.

After 12 years those experiences are history. In 1998 there were in Chicago more than 10.000 floor traders, working on the floors of CME, CBOT, and many other less known exchanges. But in 1998 computers and electronic trading started their ascent to power and it was – or at least now we know it was – the start of the end.

Now just 1.000 floor traders still exist in Chicago, and they are nowadays undergoing the era of transition since the open outcry system is a dead man walking dealing system: computers will take complete grasp of trading in a few years, volume already passed to the Globex system already in the early years of the third century.

A new movie tells the story of the floor traders with a lot of interview to the few still active: “Floored” is a new movie signed by James Allen Smith, you can pre-order the cd rom for $ 23.95 on http://www.flooredthemovie.com/ or you can watch it free on youtube at https://www.youtube.com/watch?v=–H8SY334Zw&t=9s  And over all you can watch many pieces of the movie: if you feel depressed, if you had a difficult trading day, if simply it is a bad day, take my suggestion, watch the trailers and you will find new energy.

This is a movie about those guys that without any education but armed simply with an inexorable desire of riches moved to the floor from every walks of life. Many failed, many made millions putting at risk the mortgage of the family house. “I love trading, I hate people” says a veteran floor trader. Or again another one explains how he cannot trade with a computer off the floor, and if the exchange closes he will be forced to look for another job. But the most amazing phrase is the following: “Back in the nineties the computer guys … we would have laughed at them … now they got their revenge”. I am a computer guy and I am taking my revenge. Trading is the only one job in the world where it does not depend or it has a little impact who is your father and who where your friends. The game is easy: you make money, you lose money. I am a computer guy and I want my revenge.

But I pay respect to people like Charlie D., the legendary Tbond trader in Chicago, died by leukemia after having piled dozen of millions in profits (see “Charlie D.: the story of the legendary bond trader”, by William D. Falloon, Wiley). One on the floor I met a guy he traded with Charlie D. It was the first day in the floor, and he took a little trade but suddenly the market collapsed and nobody wanted to take his losing position from his hands: he was a newbie, so that old floor traders had no trust in him and they did not looked at him. He was yelling, he was offering his bid with hand gesture, but simply he was a phantom. Loss was widening minute after minute, still some minutes and everything was gone and this floor trader would have lost the trading seat. Then  Charlie D. suddenly came our from the floor and asked him how much he paid the contract: he bought back the losing position at breakeven for the newbie trader. “Watch our, my friend, this is a welcome from me, next time nobody will help you”. We need to pay respect to the floor traders like Charlie D since these really were what a trader should be. Forever.

 

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About Author

Emilio Tomasini is Chief Editor of the Italian edition of TRADERS’ MAGAZINE (www.traders-mag.it), the leading monthly publication in Europe for trading and investment, and since 1999 he organizes the TRADERS’ CUP the most important real money European trading competition (www.traders-cup.it). His personal weekly free newsletter L’Indipendente di Borsa (www.indipendentediborsa.it) is one of the most reputable Italian financial media and counts more than 100.000 readers. His website in English is www.emiliotomasini.com

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