[ I N D E P T H | C H I C A G O T R A D I N G F L O O R S ]
screen trading . The inefficiencies included out trades , which take place when there is a dispute over a trade between two individuals . They are caused by varying scenarios , the most common being when two separate traders think they have bought the same individual order or when there is confusion over the price between a buyer and a seller .
“ Sometimes it was difficult to understand what was going on and what was being transacted . You ' d have to be very alert and attentive , and you still wouldn ' t see everything that happened . But using the trading screen , you see every single trade ,” says Farley Owens , executive vice president , product management and marketing at Trading Technologies , and former clerk and trader at CBOT .
Farley Owens left his graduate job at IBM and moved to Chicago with his college roommate , Harris Brumfield , in 1991 to clerk for him on the CBOT floor in the 10-year treasury futures pit . He left the floor in 1999 to join Brumfield , now the majority shareholder in Chicago-based trading technology provider Trading Technologies ( TT ), to explore the world of electronic trading .
The introduction of TT ’ s technology responded to growing demand for globalisation and to trade on multiple exchanges . This was previously a cumbersome process that involved multiple systems and trading over the phone with several brokers . TT ’ s scope now covers six continents , most recently connecting to the Johannesburg Stock Exchange through an agreement with brokerage Applied Derivatives in October last year .
In the open outcry system Owens says that some of the most successful traders were often the largest ones : “ There were definitely advantages to being tall . You needed to be able to get the attention of the brokers . That ’ s where most of the floor traders were making money and getting the edge if they could spot you or if you had a reputation for being a bigger trader . Someone who could take a large order or a large portion of a big order .
“ It was very competitive in the pit , there was a lot of pushing and shoving . There were a lot of exathletes and really tall , big guys . It was mostly guys and not many women on the floor ."
Continued support The Chicago Flood of 1992 lays witness to the tenacity and the audacity of the open outcry trading pits . Repair work on a bridge crossing the Chicago River burst a disused utility tunnel and flooded basements and facilities across the city . The water damage cut off most businesses from their
“ It was very competitive in the pit . There was a lot of pushing and shoving , and a lot of exathletes on the floor - tall , big guys .”
FARLEY OWENS , EXECUTIVE VICE PRESIDENT , PRODUCT MANAGEMENT AND MARKETING , TRADING TECHNOLOGIES , FORMER CLERK AND TRADER AT
CHICAGO BOARD OF TRADE
invaluable power supplies . But not CBOT , laughs Owens .
Generators were sourced alongside hundreds of metres of extension cables running up the side of the building and onto the trading floor , plugged in to keep the floor running while the rest of the city experienced a total power blackout .
“ They were able to keep the trading floor open and it was insane because it just shows the ingenuity of people in the business . They ' re going to find a way to make things work ,” Owens adds .
The addiction to finding a way to make things work has driven the need for better efficiency and execution , sourced through technology . As the ongoing movement towards electronic trading has continued , the closure of the pits has become somewhat inevitable .
On 4 February 2015 , CME Group announced that because the portion of its futures trading accounted for by open outcry had fallen to just 1 %, the futures
60 // TheTRADE // Summer 2021