Market veterans mourn the slow death of historic trade pits

When a young law student called Leo Melamed In 1952, he arrived in the northern city of Franklin, Chicago, 110, where he thought he was a law firm, conducting an interview, the chaotic scene of which blew him away.

Merrill Lynch, Pierce, Fenner & Beane was, in fact, a broker, և the case was for a “runner” who closed a message around the Chicago Mercantile Exchange, where financial contracts were settled from onion to egg.

Shouting at the whirlpool of people in colorful jackets, joking, making deals on huge blackboards, recording the end-of-day results with Polaroid cameras, he connected the young people MelamedAfter graduating from law school and quickly aborting his position as a lawyer, he returned to The Merc and in 1969 became his chair.

“We were a group of boys who did not know the difference between turkeys or treasury bills or Swiss francs’ animals,” he said. “I immediately fell in love with everyone, everything.”

At the Chicago Mercantile Exchange in 2001, traders and clerks work on the bottom of the Eurodollar trading pit © Tim Boyle / Getty

Covid-19 destroyed “open shoutTrade. Traders who prefer to negotiate face-to-face deals won a rare victory this week when the London Metal Exchange canceled an earlier plan to “close forever”.ring– the last significant traditional trade hole in Europe.

But last month, Melamed University, now called CME Group, announced that this was the case. close trade taxes forever which were closed by the epidemic for the first time a year ago, with the exception of the euro-dollar sample pit. For many in the Chicago business community, it marked the end of an era.

CME daily trading volume stock chart in futures և options showing the shock of the recent death of a traditional

In: trade holes where Melamed շատ many other finance titans learned their craft – և immortalized in popular culture with the film Shopping places: – was slowly dying even before the epidemic. Over the last few decades, the vast majority of trade has moved around the world algorithmsToday, even the New York Stock Exchange is mostly a television studio. Most of the real trade takes place in its data center in New Jersey.

Others survived, including NYSE Arca Options Tax in San Francisco և Box Options Exchange in Chicago. Following the trend, CBOE Global Markets, which trades the Vix Fluctuation Index, is building a new, larger trade tax to accommodate hundreds of traders, and will move there in 2022.

Keeping the ring open: LME: tries to accommodate both traditional members who prefer open shouting and its larger merchant and financial partners who support the e-commerce movement.

Wall St. Merchants 1929

Merchants on Wall Street in 1929, when the New York Stock Exchange sank, caused a stir in the banks © AFP / Getty

NYSE Traders 2021

Traders work on NYSE’s quieter trading floor in 2021, when US stocks rallied to record © Courtney Crow / NYSE / AP

LME CEO Matthew Chamberlain said he hoped the hybrid approach would extend its lifespan. “I love the ring, I think everyone in LME loves the ring. It’s a big part of the culture, most of it is that many of us joined that organization. We love the community, the excitement. “From a personal point of view, I hope it will be here in 10-20 years.”

Willide Nean, head of Chicago-based Eurasian options at CME, said it was still valuable to have someone in the CME’s Eurasian options hole, and predicted that the tax on its survival would remain open for many years to come.

“Many of the strategies for selling this product are complex,” he said. “This kind of complex trading is much more effective when all parties are talking to each other in real time rather than seeing flashes on the screen.”

London International Financial Futures Data Center
Out-of-town data center servers replace old London International Financial Futures (LIF) trading floor © ICE Futures Europe

The epidemic offered a live scrutiny of what would happen if markets that relied on tax trade suddenly closed. The results were not encouraging to openly shout, says Thomas Fitch, RV Assets, the UK’s co-founder and CEO, which provides trading algorithms for market makers and property sellers.

While the euro-dollar options market traded about 60 percent overnight in a fully electronic hole, the volume and price difference that people will buy or sell have had a profound effect, Fitch said.

But after the pit’s reopened, hybrid sales resumed by about 0.15 cents per contract. Fitch says in a market that sells 1.5 million contracts a day, that costs an additional $ 1.35 billion for the end user. “Why did it move?” It suits people who make trades, brokers, market makers. ”

Tokyo Stock Exchange 1937

View of the Tokyo Stock Exchange in 1937 © James A Mills / AP

Tokyo Stock Exchange at the end of tax trading in 1998

Tokyo Stock Exchange Traders in 1998 Concerts at the closing ceremony dedicated to the end of the floor trade © Alamy / Reuters

Many veterans are increasingly rejecting the fact that open grievances will soon disappear. “It simply came to our notice then [than people expected]”It’s not completely dead yet, but it’s going to bleed as e-commerce takes on more and more volume,” said John von Lotia, who started digging holes before reading an industry newsletter.

After the death of an ex-boyfriend in 2011, he began an oral history project to collect the memories of open-air protest veterans, which were freely modeled on the Library of Congress Veterans History project. “We are losing a lot of street vendors every day. I thought it was possible to imagine how markets have been around for so long,” Lotia said. “It was a real bargain where millions of dollars could be traded by exchanging hand signals.”

There was a shift emotionally charged For many merchants who remained faithful to the era, ընկեր the company and creativity they created. Melamed recalls how some CME brokers once criticized him as “Darth Vader”, eventually accepting the e-commerce, but admitting his “sadness” to see most of his open appeal sites finally closed. “The floor was a crater of ideas,” he said. “That’s what you lose.”

Trade on the Hong Kong Stock Exchange in 1978
After the sudden rise in the French trading rate on the Hong Kong Stock Exchange in 1978 © Chan Kiu / South China Morning Post / Getty

But they lost a battle that began in the early 1980’s when pioneers such as Thomas Peterfi They linked their data streams to key computer programs that performed the same functions that vendors performed to scan the market for inaccurate quotes. At that time, people were still doing business.

Peterfi still remembers his first day in the trading pit, the 1967 Comex silver sample floor in New York. the peak ի: Shopping places: later filmed), which left an indelible mark. “It was serious money, very exciting,” said Peterfi. “Computer numbers can be touching, but not as much as people shouting at each other.”

He eventually saved enough money to buy a place on the American Stock Exchange in 1977, the infamous little brother of the NYSE, which initially began operating as an overseas market on Lane Street in lower Manhattan. But being a lightweight structure with a heavy Hungarian accent, other tax traders found it difficult to hear and understand Peterfi’s tax burden on Amex, which provided the impetus for his efforts to usher in the computer age.

Like many open-minded veterans, Peterfi is nostalgic, but he hardens with realism. “It was a great experience, but everything is changing. It was interesting to ride a horse-drawn carriage. ”

The slow decline of the floor trade

Oil traders work at the bottom of the New York Mercantile Exchange in 2012.  May 11 in New York City

Oil sellers work at the bottom of the New York Mercantile Exchange in 2012. On May 11 in New York City © Just Astin Sullivan / Getty


The “Bund battle” led to the German Eurex exchanging the London’s long-term debt futures market for London’s rival. Contracts were sold by “open complaint” in the UK, but traders preferred the electronic version because it was easier to sell remotely or move en masse.


The Intercontinental Exchange, then a small start-up, made a big splash by buying the London International Petroleum Exchange (IPE), where most of it was sold on the ground. Taking into account its ICE from the Battle of the Bund, ICE built a modern electronic platform.


ICE announced the closure of the IPE holes, making energy futures contracts such as Brent raw materials completely electronic. Weeks later, New York Mercantile Exchange (Nymex), then IPE’s largest competitor, unveiled plans for an open pit in London.


Nymex abandoned its plan to resume tax trading on oil contracts after sparking little interest from traders.

2012 year

The Intercontinental Exchange concludes its 142-year history by closing the soft trading holes of New York Commodities, as volumes shrink in favor of e-commerce.


167 years later, CME closed most of its stores in Chicago and New York. Open trade fell to just 1 percent of total futures. The decision included Nymex futures bids that CME bought 7.9 years ago for $ 8.9 billion. Only holes with some options left open.


The coronavirus forced the CME և Cboe Global Markets to close their trade taxes in Chicago, but in the summer they reopened many of them. As part of the warnings, traders had to undergo medical examinations and wear face shields in the pit.


The London Metal Exchange has canceled its previous bid to close the Ring forever after the epidemic was suspended.

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