1865 Chicago Board of Trade membership card

CBOT membership

1865 Chicago Board of Trade membership card

Every collector can relate to the excitement of obtaining a highly significant item to add to their collection and I was immensely thrilled to purchase this 1865 CBOT member’s ticket from one of the world’s great financial memorabilia collectors.  I have many similar tickets from different years, even earlier than this, but 1865 is particularly significant because it was the year that the CBOT began trading standardized futures contracts and instituted margin requirements.  For many years prior, makeshift futures agreements were transacted by members, but the formality of these contracts were finally recognized and written into the CBOT rulebook in late 1865.  The name on the ticket is Mr. F.S. Day, who was listed as a commission merchant (broker) in a Chicago directory of that era I also researched.  Unfortunately, I have no idea how this piece was originally obtained and survived the 1871 Chicago fire.

To further get a sense of the 151 years since the membership ticket was issued, 1865 was the year that the Civil War ended, President Lincoln was assassinated, the population of Chicago was roughly 250k and the Union Stockyards opened in December of the year.

For a perspective on how immense the exchange traded futures markets have grown since 1865, the notional value traded on futures exchanges peaked in 2007 at $95 trillion and have since pulled back to only $69 trillion in 2013 when I was last able to find figures.  In comparison, the US stock market has a capitalization of roughly $20 trillion w/global equities at a roughly $70 trillion market cap.

Collecting this type of stuff is admittedly a nerdy hobby but much more interesting than baseball and hockey cards I grew up spending my odd job money on.  Compare this to the T206 Honus Wagner baseball card, which is the most rare ball card but has about five dozen copies in existence and the market cap of MLB baseball franchises, subjectively estimated by Forbes to be roughly $35 billion, is pretty close to the CME Group’s $32 billion value.  It’s simply a piece of cardboard, but to me this 1865 ticket is a very rare link to the origin of such an amazing industry.

Constructing the Chicago Board of Trade Building

The CBOT building, like most older financial institutions, was imposingly built to provide a sense of permanence and financial stability.  It’s such an iconic building that it’s hard to think of Chicago without it at the end of the LaSalle Street canyon.  Because of how synonymous the CBOT building is with Chicago architecture, to see photos of it’s construction is disorienting, especially with it’s horological cavity empty.   (Just looked on google and “horological cavity” seems to have never been used in the English language before, but what else to call it when the clock is missing?)  I’ve got a lot of historical items tied to this CBOT building and it’s prior incarnations, this cache of 28 photos I purchased years back and just got around to batching the uploads. If the Scribd embed doesn’t load then the direct link is here.

If those walls could talk, I imagine the CBOT building could say more than any other structure in the world about all the stuff it’s seen and heard.

CBOT building construction photos by tradingpithistory

The Real Smug Trader

Trading been pretty uninspiring lately so in such market environments, I always find it better to decamp on travels whenever possible and made a quick return to Paris, which always is energizing.

Midweek after the late night Globex close (11pm local), with my wife and daughter already asleep, I left for my usual nocturnal stroll but also felt the need to stop off at a bar for the buzz of a cocktail or two.  I’ve never been to Harry’s New York Bar before and considering it’s a very historic bar, that’s about the most out of character thing I could ever omit doing.  During many previous visits to Paris, I’d guess with a very conservative estimate, that I’ve walked by the front door of Harry’s a minimum of 200 times but just never felt like going in.  Can’t explain it but nonetheless decided that it was time to drop in finally last week.

My first drink at Harry’s was great and as I settled in to soak in the environment, I saw the photo over my right shoulder of someone I knew very well….smug trader.

Real Smug Trader Harry's Paris

Real Smug Trader

As those who’ve read this blog for years know, I’ve been intrigued by a piece of trading art which I bought randomly years ago and entitled Smug Trader, including writing more about it in this 2014 post linked here.  Here is a side by side comparison of the two pictured together:

Smug Trader and original photo

Smug Trader & original photo

I asked the bartender at Harry’s if he knew anything of the photo and he didn’t so I extensively searched the internet to discover that it apparently is of an anonymous Irishman in 1899.  For such an iconic photo, there is actually little to be found of it on the net with just a reference from tublr via what appears to be a Russian vintage photo uploader.  How the artist who crafted Smug Trader found the photo in what would’ve been the early 1970s can be anyone’s guess.

So furthermore, Smug Trader is really nothing but a meme before memes were a thing….very disappointing but if I had to learn the truth then this was the best possible scenario.  Either way, whether it’s Smug Trader or the drunk Irishman, one thing I always believe is that market advice from the drunk at the end of the bar is no worse than any self proclaimed experts.

Nick Leeson’s Barings trading jacket for sale (again)

Leeson Barings jacket

Nick Leeson Barings Trading Jacket from Authenticate It

It’s been nine years since KPMG, the bankruptcy liquidator for Barings, sold some trading jackets from Barings’ SIMEX operation as one of the final duties to wind down the estate.  Included in that batch of jackets was most notably,  what was purported to be Nick Leeson’s personal jacket which was sold for 21,000 GBP to fund manager Paul Taylor.  The remaining other jackets of the Barings brokers and clerks were sold off individually and I believe a couple were donated for charity auctions.  I have a couple Barings jackets that I’ve bought from the initial purchasers and it’s a unique piece of trading floor memorabilia as I’ve often blogged in the past about it.

Nick Leeson has brought forth the jacket pictured above, then describes in a statement, that it was in his possession on the day he fled and was part of his personal property which was boxed up.  What I find most interesting is that in Nick’s statement, he debunks the idea that the jacket which Paul Taylor bought was actually a jacket which Nick wore.  Seeing that Mr. Taylor is so secretive that no photo exists in the public domain of him, I don’t expect this to be contested publicly if Mr. Taylor were to even believe otherwise.

The jacket is currently for sale at this link and I hope to learn of it’s eventual sale price once it’s purchased.


The greatest LIFFE trading floor video

Here is an excellent, must watch 38 minute LIFFE video from the early 90s which, unfortunately, does not have sound.  Although I never made it to the LIFFE floor before it closed, this video gives an excellent visual sense of both the scale of the floor and a lot of tight shots to isolate individual roles.

For those of you who wanted to identify which pit is which, the following trading floor map is pictured from pages 264-265 of the book LIFFE: A Market and its Makers by David Kynaston.  This book can be found online easily for a nominal price still.

LIFFE trading floor map

LIFFE trading floor map

Also for quick reference on the basic LIFFE hand signals, here is a simple guide that this website commissioned for print illustration by Mike Nudelman.  There still are some of these prints in inventory although they aren’t listed on the shop page.

Hand Signals of the London Trading Pits by Mike Nudelman

Hand Signals of the London Trading Pits by Mike Nudelman


CBOT membership certificate from 1879

CBOT membership

CBOT membership certificate from 1879

Late last year I was fortunate to obtain this beautiful 1879 CBOT membership certificate from an older trader who was cleaning out his house.  I’d imagine there might be older certificates which exist but I have not seen one myself!  In my collection of trading pit related items, there are many awesome things but this certificate ranks amongst the best and most rare.  When I became a CME member in 2002, rather than a beautiful certificate like this, only a printed form letter was sent to mark the occasion.

For the CBOT, the year 1879 was most famously regarded as the year bucket shops proliferated and it’s still fascinating to read of the history.  In a rare case of retail order flow getting the better of such shysters, legitimate sounding bucket shops such as “The Merchants Grain & Stock Exchange” along with the “Chicago Grain & Provision Exchange” both blew out as a bull market in wheat caught them short.  Modern day bucket shops that offer forex trading operate on the same premise, offering amateurs massive leverage which the law of large numbers inevitably makes it easy for them to get wiped out, which is why the current forex trading platforms have huge marketing budgets to attract replacements for all those who continually blow out, very sad.

There is a lot of animosity about current CME Group membership pricing, as seats are the lowest they’ve been since demutualization.  Things have changed in the last decade whereas now they’re seen as unnecessary since most new guys trade and stay under a prop group compared to around a decade ago, it was previously an aspiration for most traders to buy their own membership and trade independently.  Exchange memberships are now simply a tool/trading instrument that can’t afford to have sentimental value attached and I’ve structured my memberships accordingly, although it wasn’t easy to come to that conclusion.