Floored

I remember they were throwing paper in the air and there was just this mayhem.

I looked at him and said 'what's going on?'

He said well you know this is where they work, this is what they do'

'This is what happens every day.'

I was just like thrilled, I was like this is something I've never seen before.

You know, eyes got wide, I was just ahh.

Everybody looked like they were in a riot.

But there was some kind of order to it.

And I just had to be part of it.

From that moment I went literally back to my workplace and game my two-week notice.

Without having a contact.

Without knowing how I was going to get on the floor.

I Just knew this was where I needed to be.

I needed to be onto the floor.

FLOORED

The biggest pits in the world are here in Chicago.

Chicago Mercantile, the Board of Trade, Board of Options Exchange,

even the Chicago Stock Exchange.

There's no place else that you have nine thousand pit traders

all in one city, no where else in the world.

This is the bastion of capitalism.

Player of railroads of the nation.

Stacker of wheat.

Hog butcher to the world.

That's what we do here.

If Chicago's know for anything else, let it be trading capital of the world.

This is Lasalle Boulevard, all the way down.

In the summertime it's absolutely beautiful, all the trees full up.

This is where trading started.

Why do we have so many traders here?

I think it really is an entrepreneurial spirit

and It's a very competitive environment.

I know the guys on the trading desks in New York

are also very competitive

but it's not physical. Chicago it's physical.

It was based on gentleman's rules.

It was based on integrity, honesty, mutual respect.

But the business in the pit was the furthest thing from gentleman's rules.

I mean, you saw the worst in everyone.

You're standing there and somebody spits in your face

somebody inadvertently stabs you with a pen

or steps on your foot or spits on you like I said.

It's like something that you don't even really address

It's like completely, you're immune to it

it's like, it's silent-- quiet in the chaos.

The physicality in the pit was ridiculous.

We got to the point where at times the pit was physical

that before the start of the opening bell

we could pick our feet up off the ground and not fall.

The open-outcry process

is you know, eighty percent bravery.

I mean it's a perspiration game, you have to have--

you have to have nerve.

Some are brilliant, some are totally eccentric.

Some are totally nerdy, some are just flagrant jerks.

At the Board of Trade.

The interview process that I had to become a member

I remember the one question they asked me:

'What do you want to do?'

I said 'I want to make a lot of money and leave'.

You never found an ad in the paper

you know, it was all people who trusted you. A friend of the family got you on there

because you were sharp or you had potential.

I grew up in the suburbs of Chicago.

My older brother is four years older than me.

He had already been trading for maybe about a year or so.

He thought I'd be really interested in it.

I played sports in college

and my brother said that trading in general is kind of like sports.

When the bell goes off... 'boom'.

Like throwing a touchdown pass in Michigan Stadium

with a hundred thousand people cheering.

Just that adrenaline rush,

I mean it's insane.

It's not a normal job.

I mean it's not a normal job you're not getting a salary every two weeks.

You don't have this health plan,

you don't have your 401K. You have to do it yourself.

When you've had a taste of the money you don't want to go back to being in the corporate world.

I mean, I just couldn't see myself working for a firm

and getting reamed on by a boss.

Probably, Seriously, I'd probably tackle him or something.

I'd be like, you know, 'Who are you?'

This is Credence Clear Water Revival, that's my acronym.

This is my brother's first album

The Endless Summer.

And I got it for you know, colorful reasons.

You've got your little groups. You've got your South Siders,

Your North Siders

you've got the Jewish click, you've got the Irish click. You've got the Italian click

I'm Polish, I don't think we have a click.

You've gotta mesh and mind your niche.

There's a lot of uneducated people,

which doesn't matter. The uneducated people have a tendency too to make good money.

When you're in there from 8:30 to 3:15 it's all about money.

One guy's misery is one guy's, you know, profit.

Sad to say but that's true.

Not that I take advantage of that.

But maybe I would.

FUTURES TRADING 101

By the middle of the nineteenth century

Chicago was emerging as the transportation hub of America.

Trade routs by rail and water converged on the city

giving birth to its famous stock yards and slaughter houses.

And a town hall market that would later become known as the world's first modern Futures exchange.

On April 3rd, 1848, eighty three merchants founded the Chicago Board of Trade.

Futures trading provided an opportunity for buyers and sellers to manage their risk

against unpredictable price fluctuations.

Too many cattle this year?

The beef prices are low.

Drought in the Midwest,

the corn prices go higher.

If both the buyer and seller can agree on a price ahead of time

we call this a Futures contract.

This agreement allows them the opportunity to protect themselves against paying to much

or selling for too little.

So who are all these guys yelling and screaming

and what are they doing?

As the exchange grew in popularity, at times there'd be more sellers than buyers.

Or a demand with no one there to meet it.

Entrepreneurs saw an opportunity to take advantage of this imbalance.

Working in the middle as both buyer and seller.

This allowed them to profit by speculating with their own money

while filling a vital need for market liquidity.

Or the ease with which goods can be bought or sold in the marketplace.

These early speculators became know as Local traders.

As their roll expanded over time

they became major players on the trading floor.

In 1981 the Chicago exchanges introduced:

Metals, Energy

Currencies, Bonds

and Stock Indexes.

Attracting more interest than ever before.

Soon calls were coming in from all over the world.

The modern Local trader might trade hundreds

if not thousands of contracts in a single day.

Often getting in and out of trades in seconds.

Each time risking their own money in the hopes of profiting

as they hold their own against the expanding market!

Eighty bid!

Eighty bid! Eighty bid!

Eighty.

Thirty on two! Thirty on two!

It was a live auction

where the price of the commodity you were trading was determined

by who would pay the highest and who would sell it at the lowest price.

When I would pay five and someone else would be willing to sell it at five

we would have a match.

We would acknowledge it

Check it in the pit by saying 'I bought so many contracts from you at this price.'

and then we'd write it on our cards.

We'd end up handing in our cards to our clerks

and the clerks would take it to our clearing house.

Yellow coats were designated for clerks.

Other than that, all the different colors and different designs that you see down there

was to make you stand out among the crowd.

There were guys that had checkered jackets,

red white and blue jackets.

Anything that made you stand out in your area of the pit,

because you needed to be seen.

It's a misunderstanding

that traders manipulate the price,

That they're responsible for prices going up or down.

It's completely false.

The supply and demand drives that.

If there's too little supply and demand is high, well prices are going up.

If there's too much supply and demand is flat, prices are going down.

The traders are just in the middle all they're doing is

catching something for a tenth of a penny and passing it on

hundreds or thousands of times a day.

It's actually funny because when you first come down here it's overwhelming,

you can't figure anything out.

And quickly you kind of discover that guy's a broker, he's an order filler,

he's a big trader.

All of a sudden people take on this personality so you get an idea of what's happening.

Well then you get some confidence and some arrogance and you decide that you're gona do this

because you've been practicing and you think you can do it.

Well that's really when the learning starts.

Because that's when you realize how incredibly complex

and often times scary and difficult and hard it is.

These guys are professionals, every one of them.

Many traders trade with their own money

Each and every day to go in there and trade with your own rent money,

not knowing whether you're gona make money or not

is terrifying to a lot of people

and I found it to be very, very scary.

I don't have any clients

I don't have any customers.

It dawns on you,

Nobody trusts you to do what you do except your family.

And so in a lot of ways I'm a hedge fund manager of my own family's worth.

Money.

And they trust me not to fuck up.

The nature of trading is buying for one price and trying to sell it at a better price.

Period.

You get in there and you make your first trade.

You know, if you get whacked ten times in a row you pick yourself up by the bootstraps

and you do it again.

We started at seven twenty,

by seven thirty we were dripping of sweat.