Friday, November 30, 2012

Scarlet & Letters

Digging through some old emails today (and missing a trade I needed in the process), there were a couple interesting origins that are worth passing along.  Both were submitted by legit trading floor veterans who both had 20-30+ years experience mostly in the NY pits.  A lot of people wonder about where the year colors originated from and also how futures months got coded in letters, well here's their explainations:

"In NY (COMEX) their were only 5 hours in the trading day (5 one hour brackets) (A, B, C, D & E). The first available letter for month code is F."

"Red Sales were so called because the 13th month and forward were written  on the black board with red chalk - hence current color coding years in Chicago long-term fixed income.  The Coffee and Sugar Exchange used yellow chalk and they called these  trades yellow, e.g., Yellow September."

If anyone wants to dispute these explanations I'd love to hear about it.  However, one frustrating thing is that I've had people dispute things I know with absolute certainty that are true based upon what I saw and used myself so if anyone is going to dispute things then make sure your memory is correct.  Any and all criticism is welcomed though, info 'at'

Thursday, November 29, 2012

Secret Financial Life of Food

A great book I just finished reading is The Secret Financial Life of Food by Kara Newman which presents a broad overview of trading food based commodities in a fun, quick and approachable read.  The book is broken down in chapters based upon the history of trading certain products such as soybeans, cattle, corn, etc.... but there are also some chapters based upon non pit-traded commodities such as spices.  Most of us are guilty of not putting any thought into how these markets were developed and the book gives a good retrospective on how the markets originated, grew and sometimes failed. 

The research she put into her work is really amazing but doesn't beat the reader over the head with unnecessary facts.  This book filled in a lot of knowledge gaps for myself and one of the interesting things was to learn a little history on the American Liquor Exchange as seen below.  (click to enlarge photos)

I definitely recommend picking up the book which is already available even though the official publishing date is next week, here's the amazon link.  It's a reasonably quick read which can be knocked out on a flight or two easily.

Monday, November 26, 2012

House numbers

Another thing that was pulled from the Wayyyyyyyyyyyyback Machine was a listing of house numbers for CME clearing firms in 1999 along with the 98-99 CBOT's FCM directory which provided listings but not house numbers.  Both are pretty dear to me because it was off these two lists that I got contact info from all the firms and proceeded to write, fax and call every firm listed to get a job on the floor....and it worked obviously. 

The other funny thing about these lists is that in the earlier days of Globex, it used to show who the counterparty was in each trade and that provided some extremely valuable info.  If for instance a smart local was on the other side then there was something I was probably missing or doing wrong, if a big institutional firm like Goldman was buying then it was it was wise to scratch, reverse or get hedged, whereas if I saw Commerzbank  as a counterparty then it wasn't much to get worried about, etc....  This info was done away with probably around 2004 as too many people were doing the same thing, in particular a famed but now defunct prop firm which was rumored to have a computer program analyze it's counterparties.

Anyways, here's the listing of over a hundred firms and it'll probably bring a smile to those who were on the floor in recollecting either someone who worked for the firm, who executed their orders in the pit, a big trade a house put on, etc... and I'm sure that this list will settle bar bets of to two old traders forgetting what house was which number.

112 AB Financial, L.L.C.
430 ABN AMRO Inc.
103 Enskilda Futures, Ltd.
258 Sage Division
369 Sage SF Division
905 ADM Investor Services, Inc.
225 AGE Commodity Clearing Corp
333 AIG Clearing Corporation
743 Aubrey G. Lanston & Co., Inc.
312 BA Futures, Inc
708 Barclay's Capital, Inc.
045 Bear, Stearns Securities Corp
111 BNP Securities (U.S.A.) Inc
462 BT Futures Corp
445 Cantor Fitzgerald & Co
090 Cargill Investor Services, Inc
093 Custom Clearing
505 Carr Futures Inc
270 Chase Futures & Options, Inc
138 Citicorp Futures Corporation
175 Commerz Futures Corporation
475 Credit Lyonnais Rouse (USA) Limited
250 Credit Suisse First Boston Corp
784 Cresvale International (US) LLC
071 Daiwa Securities America Inc
092 Deutsche Bank Futures, Inc
300 DKB Financial Futures Corp
152 Dorman Trading LLC
929 DND Trading
287 E. D. & F. Man International Inc
099 ISD Division of E.D. & F. Man
102 Enskilda Futures, Ltd
315 FCT Group, L.L.C.
135 CTI
263 First Chicago Futures, Inc
709 First Options of Chicago, Inc
327 D&G Division of First Options of Chicago, Inc
005 FOC Execution Services
019 FOC E-mini
865 LBS Limited Partnership
750 Paramount Financial Corporation/ 
007 CCM Execution 
815 Shatkin LIT Division
625 TNT 
555 USA Trading, Inc
008 Wescott Group
104 Fuji Futures Inc
990 Gelber Group, Inc
525 GNI Incorporated
415 Greenwich Capital Markets, Inc
350 GSA Clearing L.P. (Goldman Sachs)
323 HSBC Securities, Inc
009 Hull Trading Company L.L.C.
825 ING (U.S.) Securities, Futures & Options Inc
023 Lion Trading - A Division of ING
500 Iowa Grain Company
660 J.P. Morgan Futures Inc
280 Kottke Associates LLC
380 Griffin Trading Company
835 Lehman Brothers, Inc
070 LFG, L.L.C.
310 GAP
245 Hammer Trading
642 H.G. Trading
072 LGU Division of LFG, L.L.C
872 Pro Trading
532 Lind-Waldock & Company
747 Locals-Lind
560 Merrill Lynch Futures Inc
600 Morgan Stanley & Co. Incorporated
700 NationsBanc-CRT Services, Inc
180 Nomura Securities International, Inc
690 O'Connor & Co. L.L.C.
213 D.T. Trading
785 McDonnell Division
710 PaineWebber Incorporated
236 Paribas Corporation
020 Prudential Securities Incorporated
084 Rand Financial Services Inc
086 RBC Dominion Securities Corporation
805 RB&H Financial Services, L.P.
100 Olympus
806 RBH E-mini
275 Refco, Inc
758 Republic New York Securities Corporation
685 R. J. O'Brien & Associates Inc
684 TJM Division of R. J. O'Brien
800 Rosenthal Collins Group, L.P.
188 Sakura Dellsher, Inc
735 Salomon Smith Barney Inc
303 Sanwa Futures, L.L.C.
826 Saul Stone and Company
888 Stone Traders
840 SMW Trading Company, Inc
549 Timber Hill L.L.C.
896 Tokyo-Mitsubishi Futures (USA) Inc
915 Tradelink L.L.C.
010 TransMarket Group L.L.C.
125 Aardvark
187 Warburg Dillon Read Futures, Inc

Sunday, November 25, 2012

Wayyyyyback machine

Looking on of the earliest exchange webpages, it's pretty amazing that these pages were considered cutting edge and simultaneously the technology of the era was good enough for electronic trading.  Click on the photos to enlarge and I linked the old page in the caption, a lot of the links w/in the weblink don't work because they weren't archived but some do. from Oct 31, 1996 from Dec 11, 1997 from Dec 28, 1996 from Dec 20, 1996 from Oct 20, 1996 from Dec 3, 1998 from Dec 21, 1996 from Oct 22, 1996 from Nov 8, 1996 from May 15, 1997

Monday, November 12, 2012

NY Curb Exchange

In doing some book research on the AMEX hand signals, I was searching on the precursor of the exchange which was unofficially known as the Curb Exchange and came across this impressive 15 second video of how handsignals were used prior to the exchange moving indoors in 1921.  Although I knew a bit of background on how the 'exchange' functioned it still surprised me to see people standing on ledges or leaning outside windows as in the clip while trading.

Thursday, November 8, 2012

I know what you're thinking

click photo to enlarge

I know what you're thinking when you look at that'd really like to own that quote board from the CBOT in back of the beautiful woman in the lingerie ad.  Well luckily it appears that exact same quote board from the CBOT is on the auction block as part of MF Global's asset disposal and you've got about a week to bid for it.  Dig deep cause MF still owes me 20% of my acct and the $2600 current bid for the board won't dent much of the $1.6 billion clients such as I are still owed.

There are a couple instances I can recall at the CME of getting into an elevator at the exchange w/a beauty like that except she had the coat buttoned up and was holding a ghetto blaster style boom box in her hand to put on a show at some brokers office. 

*sorry for lack of posts lately as I'm finally knocking out the hand signal book, for reals this time as it'll be done by year end*
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