The bag of bucks was something that really epitomized the trading floor as it was the type of thing that could only be thought up there. I can only speak to my observation of it a couple times on the CME floor in the equity index quadrant, as a clerk around the S&P pit in 1999 and 2000, but have to imagine it occurred also at the CBOT and elsewhere more frequently at the CME before I got there.
Like anything with the trading floor, it’s concept was very simple. The person running it would walk around the trading floor and announce that they were starting a bag of bucks later on and specify some additional details like if it was for $20 bills or $100 bills and if a single bag for everyone or if there’d be a second bag that was for clerks only. In those days, clearing firms had a fair amount of cash on hand which could be withdrawn from a trading account so the sums could escalate easily to five figures. To participate, all it took was to write your name or badge on the bills and drop them into the bag, unlimited. Once the collection was complete, the bag would be shaken a bit to mix it up then someone would get the honor of pulling a single bill from the bag and whoever’s name/badge was on that bill won the entire bag of bucks. Tipping out a cut to the person who organized it was the only vig.
Although the bag of bucks encapsulated the spirit of the trading floor, it also juxtaposed the function of the trading pits. Since the bag of bucks was a closed activity funded only by participants on the trading floor, it was essentially shuffling money around in a lottery style, zero sum game. The trading pits required outside order flow to trade against and as I’ve written before, locals wanted to trade with brokers filling outside orders rather than profit off other locals. Another thing was for all the billions in notional value that exchanged in the trading pits, none was done in tangible cash. Good traders always had an edge to base decisions on and the bag of bucks was a pure gamble, albeit a simple one for entertainment more than anything. It also wasn’t necessarily verboten to speak in terms of dollar amounts but rather than talk dollars, traders generally speak in terms of “ticks” when discussing money on the floor.
Obviously, the CME couldn’t condone the bag of bucks so it had to be done a little quietly. There were other activities like Super Bowl square pools or making markets in sports events which can be found in any workplace but the bag of bucks was unique to the trading floor. Before my time at the Merc, I also heard that when an adjacent street was closed, some fat guys from the floor were organized to race each other. Betting on fat guys racing is also something I can’t imagine happening anywhere other than at the Chicago Merc.