Tokyo Rice Pit

click to enlarge photo

Above is a rare photo from 1936 of the rice pit in Tokyo.  The original caption on the photo notes that trading in rice "overshadowed their stock exchange in the volume of business transacted."

Wish there was more I could add on it especially of how the primary rice market shifted from Osaka, where standardized futures began trading in the 1600s, to Tokyo.

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' tradingpithistory.com

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.

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
714	FIMAT USA Inc
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
830	LFG E-MINI
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.
003	SPIKE
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

Wayyyyyback machine

Looking on archive.org 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.

cbot.com from Oct 31, 1996

cme.com from Dec 11, 1997

simex.com from Dec 28, 1996

liffe.com from Dec 20, 1996

bmf.com.br from Oct 20, 1996

sfe.com from Dec 3, 1998

hkfe.com from Dec 21, 1996

matif.fr from Oct 22, 1996

kcbt.com from Nov 8, 1996

nyce.com from May 15, 1997

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.

I know what you're thinking

click photo to enlarge

I know what you're thinking when you look at that photo....you'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*