Visiting the Chicago Board of Trade…
September 5, 2008
It has become difficult to enter the CBOT. They say that because of 9/11 they no longer let the public enter, even though there is a visiting gallery on top of the main trading room. But I finally (after a fairly long search) wound up finding Curt Zuckert, Associate Director, GLC and Product education. He is a former trader and for whatever the reason he now organizes the visits and the education of new members of the company. (I visited along with a newly hired guy).
As you know, the CBOT is undergoing both a digitalization of activities and a merging with the Chicago Mercantile Exchange (the Mercantile exchange has actually bought the CBOT). The thing that they keep repeating is that I was lucky to be able to visit simply because digitalization will eventually make the physical trading rooms disappear. Apparently, however, although they’ve been saying this for five years there are still lots of people in there! It seems to me that there still is something very valuable, something very important to gain in physical trading.
Kurt said that maybe it is the introduction of new products are made first on the physical floor and that these are a good way to make money. Yet that does not seem to be a enough reason for the persistence of the floor because these introductions are quite rare. I could not put my finger on what it is about the trading floor, but I felt that the story of its disappearance is everything but a necessary evolution. It seems to have crucial advantages that online trading does not.
The other thing which struck me is that at opening time, you really have a great frenzy, and then it’s much calmer. Curt explained that, contrarily to what we might assume, there are lots of moments of inactivity for the traders. Often the market is simply flat, it does not evolve, and therefore (or because) nothing is sold, nothing is bought. It was interesting to me because it explained why this life is livable. It explains, I think, how psychologically it’s doable. It is noteworthy that the entrance of the building is the last place in the US where you still see actual crowds of smokers hanging around.
Unfortunately I only took a few pictures, because I was not allowed to take any while walking through the floor.
The really great pictures of the CBT are those by the famous artist Adreas Gursky (see here). Of course, the traders and clerks don’t necessarily wear these colored jackets anymore.
Curt Zuckert can be reached at email@example.com.