Archive for January, 2010
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By Jacob Bunge
Of DOW JONES NEWSWIRES
CHICAGO (Dow Jones)–The Gene Siskel Film Center transformed into a trading pit Friday night, as Chicago’s derivatives trading community migrated from the floors to the theater for the premier of a documentary on the vanishing business.
The screening of “Floored,” a film chronicling the glory and subsequent decline of the art-cum-bloodsport honed in the pits of Chicago’s exchanges, drew a sold-out audience that included traders, local celebrities and combinations of the two.
“You could come in and get rich overnight, or you could lose, but there was opportunity,” said Rick Santelli, a CNBC Business News commentator and veteran futures trader who broadcasts from the floor of the Chicago Board of Trade, at the screening Friday. “It’s a bittersweet story.”
The film, a three-year project by filmmaker James Allen Smith, tells the pugnacious tale of futures and options trading through the clerks, brokers and market makers that helped transform Chicago’s exchanges into a global center for managing commodities, currencies, interest rates and stock options.
Set against a backdrop of garish trading jackets and a soundtrack of shouting, past and present floor traders in the film wistfully recall the days when fortunes were made and lost daily in Chicago’s pits, a story replete with drug abuse, wrecked marriages, crippling stress and the occasional fling with a Playboy Playmate.
In their mid-1990s heyday, according to Smith’s film, 10,000 traders packed the floors of the city, a number that has since dwindled to about 1,000 as the rise of electronic trading supplanted the pits as the key source of liquidity in derivatives markets.
If there is a villain menacing the swaggering heroes of “Floored,” it is the computer, described alternately as a “virus,” a form of “cheating” and a “vile invention” by the steadily shrinking ranks of those committed to the open outcry profession. A portion of the film highlighting Chicago’s burgeoning electronic trading shops drew grumbles and jeers from the audience.
Some floor traders like Joseph Gibbons, one of the film’s producers, successfully jumped to screen trading, a realm that “Floored” depicts as no less intense or profane or profitable–but far less visceral than the pits, where spittle flies and the competition to buy and sell occasionally turned physical.
Beyond the usual shoving and poking of pens, traders in the film tell of fistfights in the plaza outside the Chicago Board Options Exchange and one incident that ended with a trader biting another’s nose.
“We were warriors, but we were also a great community of friends,” said Scott Cole, who described floor trading as his family’s business, at the screening Friday.
They are also a group clinging to a diminished slice of the American dream that allowed blue-collar Chicago kids, many possessing little education beyond a high school diploma, to make a living on par with doctors and lawyers–at least for a while.
“It’s a story that needed to be told,” said Kenny Ford, who still works the cattle pits, where electronic trading has yet to render the floor obsolete. “This was the greatest time in our lives.”
-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; email@example.com
I had the pleasure of sitting down with Eight Forty-Eight host Alison Cuddy to chat about Floored:
The Chicago Board of Trade and The Mercantile Exchange are more than just venerable institutions where small fortunes are won and lost on a daily basis. They’re spectacles, full of larger than life characters. Filmmaker James Allen Smith captures them up close and personal in his film Floored.The documentary is a rare look at life in the pits and how a young upstart – technology – is changing things. Smith knows it well. He was a web designer for a number of trading companies. One day, he was called down to the Merc by one of his clients. What he thought would be a routine visit turned out to be his first time on the floor. He says it was a shocker! MORE