Sunday, February 22, 2015

Trading Pit Hand Signals book video trailer

We've taken a long while to finishing the Trading Pit Hand Signals book trailer but it's great to finally release it as the video really captures the depth of the book.  Hopefully you agree and get a sense for the pit because we put audio from the wheat pit at the KCBT throughout the minute long video. 


The reason behind the release delay, besides a multitude of life's distractions, was that we were going for an entirely different concept and shot film for that other concept a year ago.  My favorite rap album, Ice-T's O.G. Original Gangster, has a pretty funny second track entitled "First Impression"  (some NSFW language on that link) which we aimed to recreate by talking about the trading pits with the book serving as a prop.  Although we came close after some attempts, we could never nail the script concept for what our expectations were, so after a year sitting on that footage it was time to just push out something different. 

If you're interested in picking up the book, the link to it on Amazon is here and the ebook link at iTunes is here.  And if your interest level isn't that deep then that's cool as well, I only want people buying it who are really into it.

Besides helping me w/the trailer, my bud Jack also has recently created a great SF based webseries entitled Tech Boom which is absolutely hilarious and based upon the tech scene here in SF.  One of my favorite episodes is below and runs only a couple minutes, some slight NSFW language in there.

Wednesday, February 11, 2015

Followup on futures trading pit closure



Well, I guess I should remark a bit more on the closure of the futures trading pits now that I've had a chance to reflect upon things.

The news hasn't elicited much more than a "meh" response on my part for a couple reasons but mainly because the futures trading pits have been rendered almost irrelevant for a long time.  Some pit traders continue to find niches which the floor can serve a purpose and the closure sucks for them but ultimately this announcement was going to come at some point.  From a personal perspective, I last traded in the pit in 2005 as I was one of the early eurodollar traders to move entirely electronic from the pit (more on that is a followup post), so my perspective is certainly removed from the perspective of a floor trader in 2015.   A few times a year I'll still go down to the floor to walk around but things are so different than the glory days that it no longer excites me.  Perhaps this is a crude analogy but it's almost like visiting a hospice patient, alive but in terminal decline that is hard to see when remembering previous vitality.   This space is oriented towards the history of what it was, not necessarily what it is now. 

A funny encounter to relate the state of things I had late last year w/a couple amigos, one a former veteran pit trader who resumed his legal career after leaving trading and the other a long time options pit trader that at the time still went down to his options pit everyday.  The ex-pit trader said, "I miss it" regarding the excitement of the trading floor and the current options trader said, "Ha, I miss it and I'm still there everyday."

One nice thing to come from the news is that there is a greater nostalgic appreciation for what an amazing environment the trading pits were, which is a big turn from how bitter a lot of people felt towards the trading pits previously.  Hundreds of thousands of people either had direct or a single degree of separation from the pits and it's triggered a nice retrospective look into open outcry before the markets evolved electronically.

The various news stories on the closure were more a reflection of sloppy journalism and tired cliches than the trading pits but hopefully some interesting content emerges in the lead up to the actual closure.  Of course the best stories of the trading pits will never be told and while there are a few that I can finally share after the futures pits close, the funniest and most outrageous won't make it to this blog. 

As far as determining a certain date as to when pits will close, I would guess that it won't be a firm date right now according to how CME Group operates.  The last controversial announcement they had was dismissing the prior CEO by stating he was leaving by yearend, then accelerated that time frame to months and ultimately it was later noted that he left a couple weeks prior via a regulatory filing.  Thus, with how image conscious the CME Group is, anything can happen regarding the actual dates.  I just want to be there for the closure of the famed wheat pit.

Regarding this space, the news has accelerated a few things that have been on my to-do list for a long time.  The website's content management system (CMS), which was custom built in 2008, needs to be expanded and I'm looking at a couple other turnkey CMSs to shift to.  A new CMS will really expand the scope of capturing this history in a big way and allow the website to be more visually driven.  I have boxes of historical stuff which will be great to put on the internet but it's hard within the current CMS to make that happen so sometimes a fresh start is necessary.  Trading, babysitting, hockey and beer take precedence to the CMS switch but I'm hoping w/a little motivation it'll happen within a month or so.

Wednesday, February 4, 2015

End of futures pits in July

Time to break out the trading jacket and cards one more time and card up a floor trade for the first time since 2005.....

CME Group to Close Most Open Outcry Futures Trading in Chicago and New York by July; Most Options Markets to Remain Open

Fare Thee Well isn't just the tagline now for the final Grateful Dead reunion concert in July at Soldier Field but also that same week will see the end of futures trading pits as the CME shifts all futures contracts (except the spoo pit) entirely onto the screen.  What a long strange trip it's been.....  That is shaping up to be one helluva week in Chicago for me!


BTW, apologies for not posting in last 6 weeks as between trading and other stuff I'm too busy.  Any time away from the trading screen I'd rather just play with my baby girl rather than doing trading pit history stuff.  I'll get back on the grind before too long though. 

Friday, December 12, 2014

Dancing in the pit



I'm a bit busy lately so will just put up this video of a guy dancing in one of the currency pits at the old Merc.

Tuesday, December 2, 2014

Singapore Exchange documentary



To celebrate 30 years as the premier Asian futures exchange, the Singapore Exchange recently released the above video, entitled Founding Futures.  The 19 minute documentary provides a great retrospective of SGX's origins which were initially developed upon the trading pits of SIMEX and is a mix of vintage trading pit footage in addition to commentary from those who built or traded at SGX. 

I really enjoyed watching the video and it brought back a lot of memories since the group of other locals I traded with used to be really active when it served as the overnight eurodollar market.   Days were very long for many on the SIMEX/SGX floor as the eurodollar market was open about 12 hours each day and for many, including the excellent broker we used (Amelia Phua, email me if you read this!), worked the entire session on the floor then stayed there to track how things rolled onto Globex after and subsequently the Chicago open. 

One funny memory I'll share really quick was how kiasu the pit was when it came to even small trades.  At the end of each day we'd get a breakdown of each trade and how it was carded up, for something like a 25 or 50 lot the pit broker would often card up a dozen people on the other side which always seemed like a nightmare to constantly keep a count straight. 

The SIMEX/SGX trading floor was opened from 1984 and twenty years later in 2004, the exchange began the transition to becoming a fully electronic marketplace.  For the Singaporean trading pits by mid 2006, it was finally game over, lah.


photo credit: http://p0kka81.blogspot.com

Wednesday, November 26, 2014

Turkey futures

photo credit: Chicago Tribune archives

Back in the late 1940s, turkey futures contracts were traded at the CME as shown above in this clip from 1949 with delivery months in November and December of course.  As Billy Ray Valentine also came to learn, "it ain't cool being no jive turkey so close to Thanksgiving."

Monday, November 24, 2014

Japanese open outcry seafood trading

image credit: http://www.tsukiji-market.or.jp

Over the weekend I was in Tokyo and on Saturday went back to the Tsukiji Fish Market as I hadn't been there the last few visits after previously always making it a part of each Tokyo trip.  For those who haven't visited, it's the largest fish market in the world and a bit beyond description for the scale and activity, but I'm always left with the impression that the planet's oceans have been entirely fished out considering the immense amount of seafood there.  The interest of visiting it this trip was mainly because it will relocate in a couple years and modernity will remove a lot of it's current appeal. 

As it relates to this website, the seafood auctions of Japan still function using open outcry and hand signals so it was nice to be back amongst a chaotic 'trading floor.'  Now my enthusiasm didn't go as far as to act like the bee girl in the Blind Melon video, but it's probably the only place outside of the futures trading pits to have groups of guys wearing trading badges (on top of baseball caps) and using open outcry hand signals to transact, so I do find it pretty cool. 

The tuna auction is the main attraction at Tsukiji and from what I've witnessed, it moves from tuna to tuna laying on the floor, not as shown above using tiered platforms like a trading pit which (I believe) is only used for special auctions like the first fish of the year.  Trading badges are restricted in number to stallholders and various wholesalers much like seats were (and kinda still are in some respects) on financial exchanges.  Hand signals used at Tsukiji are described along with a very indepth explaination of the auction processes in Theodore Bestor's book Tsukiji.  Vegetables are also auctioned using the same process and you can see how it's done in some of the following video links.

Video links:

Standard Tsukiji Fish Market tuna auction

First tuna auction of the year at Tsukiji 2009

Tsukiji vegetable market

Trader in Kyoto explaining hand signals used at that market

Tsukiji sea urchin market

Kumamoto wholesale market

Kyoto vegetable market

Busan (South Korea) market

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