April 14, 2000

click photo to enlarge

All the people in the photo didn't realize it at the time but that day of Friday April 14, 2000 was the day the stock market's tech bubble ended.  To get an idea of how wild the move was, here's a news story from that day

NEW YORK (CNNfn) - U.S. stocks plummeted Friday, capping off five days of stunning losses that handed the Nasdaq composite index its worst weekly performance of all time and the Dow Jones industrial average its steepest one-session point loss in history.

 The Dow tumbled more than 600 points, trouncing the previous record and triggering circuit breakers at the New York Stock Exchange. The sell-off gave the Nasdaq its biggest point loss of all time, topping the last No. 1 plunge set just five days ago.  But the statistical standout could be this: the Nasdaq fell more than 25 percent this week, trouncing the 19 percent fall that began Oct. 21, 1987, Black Monday.

The Nasdaq composite index shed 355.61 points, or over 9 percent, to 3,321.17, its biggest one-day decline on record. At one point during the trading session, the Nasdaq was down 411 points. The index lost over 1,000 points this week and is now off more than 34 percent from its record high set March 10 - well beyond the 20 percent decline Wall Street sees as the beginning of a bear market.

I'm in the photo in the blue jacket in back on the phone which was in the midst of my 9 month order desk stint at Nomura before moving to start trading under a group of locals at the Merc.  In front of me were the two guys on headsets doing Dow/S&P arb (7 Dow to 2 S&Ps I think it was then) and to my left in the black and red were the guys at Shatkin, behind Paine Webber in the green jacket.  A lot of great and sometimes funny memories come back from finding this photo.  The guy on my right headed the desk and he was a great, aggressive broker.  What always cracked me up was when some institutional desk would call up and ask what's going on but if he didn't know, he'd feed them the biggest line of BS like "yeah First Chicago's index arb has been coming in buying dips while Goldman has been consistent sellers and locals are following their lead so the pit is short at the moment."  Right after hanging up he'd flash a big grin my way and tell me that I should never tell them I don't know something and make up flows if so cause it's all BS anyways.  LOL

Book proofs

The print version of Trading Pit Hand Signals is getting closer as I just received the physical proofs from the printer and will have to review and make a couple adjustments before moving closer to production.  What's really exciting about the print version is that we're working with iocolor based in Seattle!

While most might not recognize the name iocolor, some of their work is likely familiar.  In recent years, iocolor did the printing for Modernist Cuisine which is the most visually stunning book I've ever seen.  It's been a lot of fun to read of early posts in that project's blog on how the book creation process unfolded with the same printer and I'm really thrilled to get the print version moving along.

For anyone who loves reading, I can testify that creating a book is easily one of the most rewarding things you could ever do.  The process thus far has had some frustrating moments and distractions but it'll be hard to find another project as enjoyable as making this book. 

My best guess remains that the print version will be available around Labor Day in early September and likely be priced roughly $25 whereas the electronic version is available now for $8.99 in Apple's itunes store.

Ibooks launch

To celebrate World Book Day yesterday, the book Trading Pit Hand Signals finally launched in Apple's Ibooks store!  It was certainly a long time coming to get to the point that the book could be presented publicly and we're working on increasing distribution. Sales are authorized for 51 countries which include most of the Americas, Europe and Oceania but Asia such as Singapore/HK is not able to purchase right now. 

Here is the link to the Ibooks store and once downloaded, my suggestion is to read it with the ipad turned sideways so both pages are displayed simultaneously:
https://itunes.apple.com/us/book/trading-pit-hand-signals/id639785084?mt=11

The decision was made to initially launch through Ibooks because it's the best platform to maintain the original design of what will be a physical print book.  The e-book marketplace is extremely fragmented and there are vast differences between rival platforms.  Complicating this further is that this book is a 'fixed format' book (think coffee table style or children's illustrated book) which requires an e-book platform to show it exactly as it would appear in physical print form as opposed to "fluid format" (think novel) that is largely text and can shift as necessary on various platforms. 

We do have a Kindle version ready to go but are withholding it for the time being because there are many platform issues which could be confusing for consumers.  For instance, a fixed format book can only be read on the Kindle Fire device and not on earlier versions of the Kindle device or the iphone, ipad or android Kindle apps.  There are a few other issues we have with putting it on Kindle so unless there are huge requests for it, we'll most likely not be doing so. 

The print version is in the works but it won't be delivered for a few months in my estimate.  We're currently working w/an amazing print house but I'm not going to leak details until things move along further.  Although we intended to keep everything onshore regarding printing, the pricing difference is so vast that the prepress will be done in the US and then transferred to China for the actual printing. 

Hopefully everyone enjoys the book because I do feel it's an accurate and honest portrayal of trading pit hand signals and how the futures pits functioned.  My aim was to keep it light and readable rather than descending into more academic details than necessary although the book is based upon an obsessive amount of roughly 400 hand signals used to trade! 

Besides this posting there won't be much done to promote it as speaking w/bloggers or journalists is generally a waste of time, so if you like it tell a friend.  The list price on Ibooks is 8.99 and w/a 70% cut, that works to just over six bucks back my way so I look at it as people just buying me a beer or two when they like the book.  Except for the impossibility of it becoming a New York Times bestseller, there is zero chance of me recouping the investment into it but you can't put a price on satisfaction.

When I get a bit more time I'll share some further thoughts on the book industry appears from a novice's perspective but in the meantime I hope everyone enjoys the book!

Trading Pit Hand Signals - the book

In a rushed way last week I did leak the cover of my upcoming book; Trading Pit Hand Signals, and w/a little more time now I can explain about the delay in distributing it.  Pretty good cover though, eh????

The book has been finished for a while but a lot of issues have arisen w/the digital conversion causing delays.  Without describing the entire e-book industry, there are basically two formats: .epub files which are industry standard and .kf8 which is Kindle's proprietary format and thus we've been working on two file creations.  The other factor which has been a huge headache is the difference between fixed or fluid formats and while attempts have been made to go w/a fluid format, it seems like the digital version will have to be fixed format in order to retain the proper design.  Of course I could always upload it on .pdf immediately but am holding out for proper e-book formatting.

Most e-books are ugly and look like simple Word documents but we're sticking to far higher standards with our creation.  I'm currently under the assumption that I'll get a fixed format version to distribute within two weeks, so we shall see.....

As for a print version, that process hasn't even begun!

CBOT hand signals circa 1998

Shown below is a 1998 pamphlet from the CBOT on trading pit hand signals I recently obtained.  It provides a deeper and more updated version of their earlier 1995 handout which I posted years ago. 

   CBOT Hand Signals

Billion Dollar Day

Although this goes beyond 'trading pit history' I'll go ahead and post it because there is a lot of parallels to how the old currency markets used to function and pit trading. 

On a single day in 1985, the BBC filmed a documentary of three currency traders, two of whom were bank prop traders in London and Hong Kong while the other was a hedge fund manager in New York.  The documentary makes for a very entertaining 30 minutes to see how much has changed in the past 28 years of trading. 

Trading pit paintings

A fair amount of trading pit paintings have been done over the years but virtually all I've seen were created by outside observers that treated the trading floor as simply another subject.  One exception can be found in the paintings of Collin C. Palmer who expressed his perspective as a CME and CBOT floor trader to create some of his paintings as shown below.  Click on each photo to enlarge for detail