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July 6, 2015 1:52 PM   Subscribe

After 167 years of continuous trading, the end of trading bell today in the open outcry futures pits of the Chicago Board of Trade, along with it's sibling at the New York Mercantile Exchange, will signal their permanent closure . Along with the closure of the pits will see the disappearance of multi coloured trading jackets (get 'em while you can), scenes of grown men screaming numbers at each other, a private sign language and gruff traders comprised almost exclusively of men, save for a few women.
posted by PenDevil (48 comments total) 26 users marked this as a favorite
 


Ah, well. We'll always have Pit. And to a lesser degree, Stock Ticker.
posted by Alvy Ampersand at 2:02 PM on July 6, 2015 [9 favorites]


I think it's going to be weird when Trading Places feels as part of a bygone age as His Girl Friday. (waits one second) Ok, there we go.
posted by selfnoise at 2:04 PM on July 6, 2015 [17 favorites]


So, just out of curiosity, have those things been anything but a pageant for years now? I always figured that open-outcry trading was some combination of training program for underperforming brokers and a gladiatorial pit run for the entertainment of senior executives, not a thing where real exchange actually happened.
posted by mhoye at 2:09 PM on July 6, 2015 [1 favorite]


In case you're a Trading Places fan and are still confused, there's a Planet Money Podcast (#471) that explains what happened at the end of the movie.

It also talks about the Eddie Murphy Rule (Section 746), which was passed inside of the Dodd-Frank Act and banned trading in commodities markets based on insider information. What Louis and Billy Ray pulled off in 1983 used to be completely legal.
posted by JoeZydeco at 2:13 PM on July 6, 2015 [11 favorites]


Wow: "Is it healthy? No, I don't think it's healthy. The physical demands are tremendous. I started lifting weights so that when these guys start pushing me I can push them back. One of the smartest things I ever did."

I wonder what, if any, outlet these types are going to channel their shouting and pushing energies into, a new sport?
posted by Matt Oneiros at 2:20 PM on July 6, 2015


I was always confused about why that game was called pit, since it didn't seem to involve any actual pits. Now I know.
posted by ckape at 2:21 PM on July 6, 2015


Guess when I'm an even grumpier old man I will have to content myself watching slow-motion videos of high frequency trading while listening to the theme song from Wall Street Week.
posted by mr.ersatz at 2:22 PM on July 6, 2015 [3 favorites]


I wonder what, if any, outlet these types are going to channel their shouting and pushing energies into, a new sport?

Rugby?
posted by nathan_teske at 2:23 PM on July 6, 2015


The floor at the CBOT has been sad and pathetic for a few years now, and all the men and women (who I see in surprisingly equal amounts out smoking in front of the building) are haggard and world weary and just look like they've been through the ringer.

Anyone interested in this should watch Floored.
posted by phunniemee at 2:24 PM on July 6, 2015 [3 favorites]


So, just out of curiosity, have those things been anything but a pageant for years now?

My friend at CBOE says that up until today they actually used the pits as backup when the computers went down. Not sure what the backup plan will be now.
posted by JoeZydeco at 2:24 PM on July 6, 2015


It'll just deprive CNBC of some nice cutaway shots while they cover the next crash.
posted by oneswellfoop at 2:27 PM on July 6, 2015 [3 favorites]


What I want to know is why is there still a NASDAQ floor? Does it even serve a purpose besides a location for CNBC interviews?
posted by GuyZero at 2:31 PM on July 6, 2015 [1 favorite]


I think you mean a NYSE floor? NASDAQ has never had a floor IIRC.
posted by selfnoise at 2:34 PM on July 6, 2015 [3 favorites]


Well remember this as the day the CBOT and NYMEX gave up their souls.

They used to be real, man.
posted by ocschwar at 2:36 PM on July 6, 2015 [4 favorites]


It turns out that if you search for NASDAQ floor images on google, it helpfully gives you NYSE images. *sigh*
posted by GuyZero at 2:36 PM on July 6, 2015 [2 favorites]


Soy! Soy! Soy!
posted by aaronetc at 2:42 PM on July 6, 2015 [3 favorites]


I went on a field trip to the CBOT when I was in seventh grade. The highlight was standing in the observation deck above the pit and watching all the activity.
posted by SisterHavana at 2:43 PM on July 6, 2015 [2 favorites]


I wasn't able to decipher with confidence through the first few links - why are they closing? Is it a long slow decline or are they being replaced by something else? Hope me please.
posted by infini at 2:45 PM on July 6, 2015


Ooh, will the observation deck open back up if there's no active trading going on?
posted by hwyengr at 2:46 PM on July 6, 2015


Electronic trading has gobbled up 90% of trading volume over the past decade or so.
posted by PenDevil at 2:46 PM on July 6, 2015


Yes, NASDAQ was always 100% electronic. I've heard a few people say that they were on the NASDAQ floor back in the 80s, but never revealed how they shrunk to fit into the computer.
posted by dr_dank at 2:47 PM on July 6, 2015 [2 favorites]


oblig.
posted by feckless fecal fear mongering at 2:49 PM on July 6, 2015 [9 favorites]


I wonder what, if any, outlet these types are going to channel their shouting and pushing energies into, a new sport?


At least one that I know has channeled them into owning and running a soccer pub on the North Side.
posted by TheWhiteSkull at 3:02 PM on July 6, 2015 [1 favorite]


I've never been to the CBOT or the NYSE.

But I have been to Royal Ascot and watched the independent bookies do their thing, with their secret sign languages and everything.
posted by Cool Papa Bell at 3:04 PM on July 6, 2015


Dylan goes electric... man.
posted by Cosine at 3:17 PM on July 6, 2015 [2 favorites]


Wow, this one really hits home for me. My father was a metals trader, and spent the last decade or so of his career trading gold on the floor of the COMEX (later bought by the NYMEX) from 1983 to around '93 or '94. Fast-forward about 6 years to late 2000, and I started my very first job working as a clerk at the NY Board of Trade (formerly the NY Cotton Exchange and the NY Coffee Sugar Cocoa Exchange.) Both my dad and I spent lots of time on that trading floor from Trading Places, and I really miss it terribly.

When I was little, maybe 6 or 7 years old, dad brought me to work for the first time. We were leaving for vacation in the afternoon, and he needed to stop by the exchange to clean up some last minute trading, and get some cash from his clearing firm for the trip. As a special treat, I got to go with him and see the pits. Not even my mom had ever seen the floor during trading, so this was really special.

We drove all the way downtown to the World Trade Center, so early that there was barely any traffic on the West Side Highway. He took me to his usual breakfast spot: his favorite table at Windows on the World on the 107th floor. It was still pretty early, so the restaurant was almost empty. Just us, the staff, a couple of other traders here and there, and a view that went on forever.

After breakfast we went downstairs and over to 4WTC. The elevators to the exchange were tucked away in a corner, behind some fast-food chain. (In 2000 when I worked there, it was an Au Bon Pain.) If you didn't notice all the guys walking around with their trading jackets and badges, you'd never know the biggest commodity exchange in NY was right behind a random sandwich counter.

Upstairs I got my visitor pass and then dad took me onto the floor. The scene from Trading Places is dead-on: you'd walk down a little hallway, past a little trophy case, kind of turn the corner, and BANG - right into a massive room with a huge trading pit right in front of you. It was, honestly, one of the most exhilarating things I've ever experienced. Even after working there for months, I'd never get tired of that moment of walking down the hallway, turning the corner, and getting hit in the face by the wall of noise.

Dad took me on a tour of the trading floor. It was a huge square room, roughly divided into 4 quadrants for each of the 4 NY-based exchanges: Cotton, Coffee Sugar & Cocoa, COMEX, and NYMEX. The entrance was in the bottom-right corner - the Cotton exchange quadrant. The big cotton futures pit was the first thing you'd see when you walked into the room. To the left was FCOJ (yes, it really existed) - just a tiny little circle of maybe 10 guys standing around a small wooden rail. Bottom-left was Sugar, Coffee, and Cocoa. Top left was NYMEX territory - this was before crude oil was massive, and heating oil was actually the biggest NYMEX product at the time. And then, top-right: COMEX. Silver sort of top-middle, and then the entire upper-right corner of the room was the gold pit. (When they filmed Trading Places, they used the gold pit to stand in for FCOJ. All the extras in the movie are wearing green badges - green was for COMEX.)

My dad took me into the pit. We wedged our way into his spot - second level up from the bottom, back to the corner. Basically right where Eddie Murphy and Dan Aykroyd stood in the movie. I was, obviously, the only kid in the pit, and all I could see in every direction were people's legs. It was like being in a massive crowd of people, but nobody was moving - everyone standing around, shoulder-to-shoulder, hip-to-hip, waiting.

A jarring, loud buzzer rang: one minute warning. I jumped - the noise was so loud and unexpected it scared me. You could sense a change in the tone of the pit: the joking and chatter stopped; the pit was quiet. A few voices started to yell out words that made no sense to me. Mostly numbers. I could just barely see the big clock on the far wall, and as the seconds ticked off the number of voices started to increase. Then, about 5 seconds before 8:30, the crescendo began. It was like someone turned the volume knob on a stereo up from 2 to 10. Hundreds of traders yelling at each other as loudly as possible. That same buzzer that just a minute before had scared me half out of my mind was totally drowned out by the yelling.

We stood there for about 5 minutes - my dad yelling along with the rest of the pit, me clinging to his leg in some combination of fear and excitement. Then my dad led my by the hand out of the pit and downstairs to go take care of the rest of his errands. I kind of stumbled along in a daze. All I could remember was that I had no idea what had just happened, but that when I grew up, I wanted to do that.
posted by Guernsey Halleck at 4:07 PM on July 6, 2015 [230 favorites]


NYMEX has an even longer history. Among the Lanape tribe of Manhattan island, wigs made of pubic hair were prized and used as a sort of currency. Since the wigs were delicate, they would be affixed to pieces of pottery so they would keep their shape. The trading post where these would change hands for goods and services went from a tent to eventually becoming the famous NYC landmark: the New York Merkin-Tile Exchange.
posted by dr_dank at 4:41 PM on July 6, 2015 [58 favorites]


All those for voting dr_dank off the ice floe say "aye."
posted by 1adam12 at 4:54 PM on July 6, 2015 [42 favorites]


TIL about merkins.
posted by GuyZero at 5:16 PM on July 6, 2015


The NASDAQ floor is a place inside all of our hearts
posted by thelonius at 5:29 PM on July 6, 2015 [3 favorites]


Somehow the opening scene from War Games seems apt, as does a following scene where they replace the men in the silos for a computer that nearly destroys the world. High frequency trading computers are the real WOPR.
posted by Muddler at 5:39 PM on July 6, 2015 [1 favorite]


the New York Merkin-Tile Exchange Well, there used to be a Grease Wool contract that traded years ago, I think on the NY Cotton Exchange, so er, maybe?

Incidentally, the phrase "trading post" usually refers to stock exchanges as opposed to commodity exchanges. The origin of the phrase comes from the American Stock Exchange, formerly known as the New York Curb Market. Before they got their own building, the traders used to literally trade out on the curb in front of the NYSE. The traders in certain stocks used to gather around specific lampposts in order to keep things organized. When the exchange finally moved indoors, the original trading posts actually had lampposts stuck in the middle of them.
posted by Guernsey Halleck at 5:40 PM on July 6, 2015 [6 favorites]


Guernsey Halleck.

Flagged as fantastic!
posted by mandolin conspiracy at 5:44 PM on July 6, 2015 [6 favorites]


The London Metal Exchange still has "kerb trading," but it isn't as rustic as one might imagine.
posted by mandolin conspiracy at 5:48 PM on July 6, 2015


I was going to say something about pork belly futures, but apparently you can't trade them anymore, anyway.
posted by dirigibleman at 6:08 PM on July 6, 2015


(flagged and suggested for the sidebar via the contact form - this is what I love about Metafilter.)
posted by joseph conrad is fully awesome at 6:08 PM on July 6, 2015


All those for voting dr_dank off the ice floe say "aye."

Slow your roll there, Slim, it's almost dinner time anyway.
posted by Halloween Jack at 8:50 PM on July 6, 2015 [1 favorite]


The open outcry trading ring at the London Metals exchange is decidedly more genteel.
posted by PenDevil at 10:22 PM on July 6, 2015 [1 favorite]


The open outcry trading ring at the London Metals exchange is decidedly more genteel.

Window dressing. It's missing the public urination outside the pub later on.
posted by mandolin conspiracy at 10:30 PM on July 6, 2015 [1 favorite]


"Floored" is apparently no longer on netflix, but the producers have put it up on youtube - https://www.youtube.com/watch?v=--H8SY334Zw&feature=youtu.be
posted by modernnomad at 10:37 PM on July 6, 2015 [7 favorites]


I read an interview with a pit trader who made an interesting point, that while a pit with 4-500 traders might be less perfectly efficient than electronic trading it was hard to have a "flash crash" since unusually sized orders would be recognised as suspect when everyone in the pit knows everyone else's typical order sizes and patterns.

I'm a little romantic about the pits as being from Chicago you always knew of guys who went in with little to nothing and earned their way up. These were also the guys who started work at 7am, but were in Wrigley for day games and getting a beer after the markets closed in the early afternoon.

Its the blue collar face of the financial industry and like so much of life below the 1%, told it is not efficient enough to remain as is while new elites congratulate themselves very much.
posted by C.A.S. at 11:17 PM on July 6, 2015 [12 favorites]


Where will Rick Santelli scream incoherently about the liberals?

More seriously, I did like the scene there in Ferris Bueller. And the BoT building is one of my fav in Chicago.
posted by persona au gratin at 1:56 AM on July 7, 2015 [1 favorite]


dr_dank: "Yes, NASDAQ was always 100% electronic. I've heard a few people say that they were on the NASDAQ floor back in the 80s, but never revealed how they shrunk to fit into the computer"

I understand your confusion, but back in the 80s, computers were a lot bigger.
posted by Joakim Ziegler at 2:10 AM on July 7, 2015 [13 favorites]


Hey, back in the day we had a vacuum-tube-based computer the size of my apartment--well, actually it was my apartment. Free heat in the winter, not so great in summer.
posted by Halloween Jack at 8:27 AM on July 7, 2015 [1 favorite]


As a former member of both the CBOE and the Board of Trade, this brings tears to my eyes. C.A.S. accurately described my life for 9 years. Out the door at 6:00 AM, but at Cirrus by 3:30. Some days we went to Wrigley and some days to the bars on Rush and Division serving free afternoon food and cheap tap beer. Then, we would head to the Burwood Tap and end the night at the Weiner Circle. In fact, was in town for the final Dead shows this weekend and ended up at the Circle at 1:30 Friday night.

20+ years later, I am still great friends with guys I met on the floor. Guys I would curse out and maybe even fight during the day while buying them a beer or 6 that night. It was a strange mix of competitiveness and camaraderie.
posted by AugustWest at 7:52 PM on July 7, 2015 [8 favorites]


Trading halted on NYSE floor
posted by infini at 9:33 AM on July 8, 2015 [1 favorite]


In a way, this was a perfect Metafilter thread - clips from Trading Places, the Simpsons, and Ferris Bueller's Day Off were all used.

If only we could have worked in that Dune clip of Patrick Stewart running with the dog, it would be the Platonic ideal.
posted by Chrysostom at 8:44 PM on July 8, 2015 [1 favorite]


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