By Benjamin Parkin and Patrick McGroarty
One morning, between messaging clients about corn options,
broker's assistant Jeff Coleman rummaged through his pockets and
discarded the contents on the floor of Chicago's trading pits.
Scribble-covered note paper. McDonald's receipts. He sucked on
cough drops to pass the time and let the wrappers float down to his
feet like a tiny ticker-tape parade.
He was partaking in a longstanding tradition at the exchange:
littering.
Mr. Coleman remembers being taken aback by the piles of scrap
paper he found when he came to work in the open-outcry pits in the
1980s. "That freaked me out at first," he said. "You wouldn't do it
in your own house."
Veterans of Chicago's exchanges have watched trade slow to a
trickle in the pits where they jostle to buy and sell contracts for
cattle, wheat and interest rates. Many of the quirks of doing
business there have faded, too.
Electronic trading has led to the closure of formerly
paper-strewn trading floors around the world. At the New York Stock
Exchange, the habit of tossing waste paper aside has waned as
traders execute deals through handheld devices instead.
In Chicago, headsets and tablets long ago overshadowed the
arcane language of hand signals they created to communicate their
trades across the din. The platform shoes some traders wore to see
over their peers fell victim to safety concerns. A strict dress
code was relaxed after some traders took to slinging loose ties
over polo shirts or refused to change clothes for days on a hot
streak.
But amid all the change, they aren't tossing out the practice of
indiscriminately tossing things out. As more trading moves online,
the trash is a tangible testament to their continued presence in
the pits. Traders who remain there say negotiating openly in the
octagonal pits is an important counterpoint to computerized
dealmaking.
Discarded notes, newspapers and candy wrappers accumulate
outside trash cans stationed throughout the cavernous trading
floor. Some traders, brokers and clerks risk hefty fines to sneak
snacks and takeout onto the floor, where food is banned, and make
little effort to hide the packaging.
"It's just habit now," said P.J. Quaid, a corn-options broker
who has worked on the floor -- and tossed aside ripped up notes
there -- for around 20 years. "Wherever it lands, it lands."
The habit has its roots in the days when Chicago's trading pits
were crammed with hundreds of shouting futures and options traders.
Participants at the world's top commodity exchanges didn't have
time to worry about anything other than striking the best deal for
foodstuffs including pork bellies, wheat and eggs.
"These were not people who were going to take the time to wiggle
and fight their way out of a crowded pit, and give up their spots,
to carefully and responsibly throw something away in a trash can,"
said Emily Lambert, author of "The Futures," a history of commodity
trading in Chicago.
Older traders remember deliberately dropping completed order
tickets onto the floor rather than handing them to colleagues so
they could move quickly to the next trade. Larry Schneider, a
retired third-generation veteran of Chicago's commodity trade,
started work as a runner in 1970, scooping up completed cards from
the floor at the edge of the pits and running them back to his
brokerage firm's desk.
"You got a lot of exercise back then," he said.
The Chicago Board of Trade and the Chicago Mercantile Exchange
merged in 2007 to form CME Group Inc. and consolidated their
trading floors into one. Trading volumes have risen to record
highs, but most is electronic now. A cheese auction was among the
most recent markets to move online from a live trading pit last
June.
"We're still buying and selling corn. We're still buying and
selling bonds," said Scott Shellady, managing director of TJM
Europe LLP, who started on the floor in the 1980s. "But I'm doing
it right now in front of six computer screens instead of 600
traders. It's not nearly as much fun."
The pits that remain are quiet and orderly in comparison. Some
traders fiddle with their phones and chat as they wait for
customers to call in orders. On one day last week, one trader said
many of his peers were off watching the Masters golf
tournament.
Traders who remain say there is less mess than there used to be,
but there are still stacks of paper on hand for recording the
trades that do come in. One morning, the remnants of several hours
of buying and selling derivatives of everything from hogs to stock
indexes were scattered on the exchange's floor. Scraps of paper
covered in arithmetic. A Red Bull can. Nut shells.
A broker halfheartedly tossed a handful of papers at a trash
can, and missed. Another launched an empty gum packet at no
particular target. Asked how she typically disposed of detritus in
the wheat pit, Kitty Shipp said, "We just go like this -- watch,"
and threw a handful of paper over her head.
Brad Lietzke, a clerk, said peers disabused him of his aversion
to littering soon after he arrived at the dairy pit several years
ago. "I've got to fit in," he said. Now he worries he couldn't
shake the bad habit. "It'd be weird working at an office because
I'd be throwing my papers on the ground."
CME declined to comment beyond its rule book, which explicitly
prohibits the discarding of refuse on escalators, elevators,
hallways and lobbies. "Commonly accepted standards of propriety and
decorum apply to everyone on the trading floor," the rules
state.
Some veterans said the exchange had tried to discourage water
bottles, but relented amid concerns that traders shouting their
orders would get hoarse.
Food is still verboten, though. Some traders sneak around
security guards to get snacks onto the floor. One recalled being
fined $250 for a peanut butter and jelly sandwich.
In February, CME sent a reminder that food and beverages other
than water, gum and hard candy were prohibited on the floor and
violations were punishable by fines up to $5,000.
A couple of months earlier, one group ducked into a corner of
the exchange floor to feast on Alaskan king crab legs and prime rib
sandwiches they had delivered from a downtown steakhouse.
Mr. Quaid, the corn broker, said lunching was essential to keep
trading activity going, lest the few remaining traders venture out
for food during the five-hour session.
"You have to feed them," he said. "It's half the battle on slow
days. You need to keep people here to make the market."
Write to Benjamin Parkin at Benjamin.Parkin@wsj.com and Patrick
McGroarty at patrick.mcgroarty@wsj.com
(END) Dow Jones Newswires
April 10, 2018 11:34 ET (15:34 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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