LIFFE serial handsignals

Again it's good to highlight a wonderful submission this time from Lee Martin who used to work on the LIFFE floor.  Lee copied this page from a LIFFE booklet on handsignals and indeed I need to correct some of the signals on tradingpithistory.com as some are incorrect.  The reason why they're incorrect is that I could only find one person who could recall what he thought were the serial month signals and some were wrong so they'll be corrected ASAP. 

It might seem like a simple task to have gotten these but I've spent years and contacted a handful of ex-LIFFE workers and everyone came up blank on them, and I'm talking friends of friends who should've known but didn't. 

Trading floor pins and buttons

You'll need to click on the photo to enlarge it and read the pins better but I'm grateful for Dean Geyer for sending in the photo of what is one of the greatest if not the greatest collection of trading pins from the Chicago trading floors. The blog in the past has a few pictures of ones that I've collected but Dean's collection is much more comprehensive of the time he spent on the trading floor.  These pins were handed out at the entrance to the trading floor to commemorate contract launches, VIP visitors, milestones, etc... and as most were thrown away pretty quickly, it's rare to see such a collection and it's very nice of Dean to share his collection.  It's a nice walk down memory lane to recall when the buttons were handed out (even though most of his were before my time)!

Back for a bit

I'll give a welcome back to myself as I'm home for a week before getting back to the travels and will push out some posts that have been in the queue.   There are still a few things I have to do on tradingpithistory.com for MATIF and LIFFE signals but it's getting much closer to a complete, accurate library of trading pit handsignals. 

End of session

I'm taking a sabbatical from the blog for a few months mostly because I'll be out of the country for an extended period of time and also so I can focus on arranging some of the hand signal information in preparation for a self published book which hopefully will be out in a year.  See ya in April...

Electronic trading cards

When pit traders thought of automated trading, one of the early concepts was to use handheld terminals rather than cardboard trading cards and although an effort was made to convert traders to using them, it didn't gain much steam.  The concept of electronic trading cards was developed shortly after the FBI sting so in 1990 the CBOT and CME began their effort to find the vendor for electronic cards.  One reason why the developement came after the FBI sting was to enhance the audit trail of trades and the FBI sting highlighted the flaws in the existing audits.

As with any sort of evolution, the push for electronic cards was a difficult one although in 1991 testing began in mock trading sessions.  The above photo is from 1996 and the caption reads that only 10 traders at the CBOT used it with regularity and at the time there was noone at the Merc who used it outside of mock trading so shortly after the effort was discontinued.

I don't know at what point the electronic card program was discontinued within the pit but it came back in different incarnations.  One thing that was pushed during the short time I clerked for a desk at the CBOT (late '99-mid 2000) was electronic order tickets from the desk to the pit broker although I forget what the name of the software/program was.  For the past decade or so, the CME has provided handheld, wireless GLOBEX access to floor traders and I think that the software is proprietary and only used for such handhelds.

Spoo pit circa 1982

The above photo is from October 1982 and shows the S&P 500 pit at the CME just months after launch of the contract earlier in the year on April 21st.  The Merc wasn't the first to launch a stock index contract and was beat by the Kansas City Board of Trade's Value Line contract by a couple months.   

FBI Operation Sourmash and Operation Hedge Clipper

In the above photo is an undercover FBI agent, can you guess who?  I'll give the answer at the bottom of the post. 

In the 1986, the FBI began an investigation into corruption in the Chicago trading pits at the urging of commodity firm Archer Daniels Midland who helped hire and train some undercover agents.  At the CBOT the codename was Operation Sour Mash and at the CME it was given the name Operation Hedge Clipper.  In January 1989 the investigation was closed as details began to leak out and the Chicago Tribune was ready to break the story which resulted in 46 traders being indicted on over 1,500 counts including, racketeering, fraud and lying to the Feds.  Once the news of the investigation broke, the FBI continued to have undercover agents work on the floor to listen to the fallout.

The NFA records of the undercover agents continue to exist under their alias at the NFA's BASIC background records which all current and former floor traders are required to be listed.

For anyone wanted to read more about this fascinating episode, I highly suggest the book Brokers, Bagmen and Moles which was put out by a couple journalists. 

For the lazy, here is a NYT article written a couple weeks after the sting was announced:
F.B.I. Commodities 'Sting': Fast Money, Secret Lives

Answer to trivia question: VOGL in the lower left corner was FBI agent Dietrich Volk, alias Peter Vogel who was given the background of being the nephew of a wealthy Uruguayan who wished to get further into commodities trading.