True Legendary Trading Stories

40Deuce · Dec 3, 2013

He couldnât get out of the market, didnât have the talent to trade his way out of his predicament, and had no friends to help him out. Later, I found out that his clearing firm had to cover his trade and they ended up giving me the cold shoulder for a couple of days.

exactly why the pits are done, with all respect.
'no friends to help him out'?
on the screen, does anyone have friends to help them out???

odds are, kid demoralized and started selling carpet ... but remote chance that, based on details of him 'haunting' you guys after the fact, that sounds very 'Charlie D' esq and how he turned corner ... kid could be running his own prop or hf empire these days

based on the expert story teller inputs.. id bet on it

cvds16 · Dec 3, 2013

http://localsfoolsgold.blogspot.be/2013/12/daytrading-20131203-tribute-to-irish.html about an xspurt trader (pun intended)

nokomisjeff · Dec 3, 2013

Quote from 40Deuce:

on the screen, does anyone have friends to help them out???

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If you are an exchange member and trade the exchange's electronic platform, you get to see an identifier on who takes the other side of your trade, just like in the old pit days. You still know who your friends are. Things move just a little faster these days.

tangentShot · Dec 16, 2013

I think you can make more money writing a bookâ¦ for the amateurs.

Quote from nokomisjeff:

About 20 years ago, the wheat market was trading in a 3-5 cent range for the day. We were standing around in the pit picking off the orders, and when the orders were slow coming in, we would play around with the bids and offers, trying to pick each others pockets.

When the market was illiquid, locals would try to move the market by bidding it up or offering it down, and we could move it around a few cents pretty easily with little resistance. However most guys had a vested interest in not getting the reputation for âspearing,â which is the act of hitting the bid when someone is trying to bid the market up.

A person who practiced spearing was usually a newbie, who would try to make a quick 1/4 cent, or $12.50. This would sometimes piss us off, as a bunch of spearing could hold a market back for the short-term, believe it or not.

There was a new local who leased a seat and had never traded more than one or two contracts at a time, who would always spear you if he had a chance. By spearing, he was taking short-term gains, not looking at the big picture, and avoiding the big moves because nobody would give him more than one or two contracts. Since he never traded more than 10,000 bushels (or 2 contracts) at a whack, he wasnât a presence, but a fringe player.

However, he had an overpowering ego, was loud and obnoxious, and thought he was a big shot because he had a badgeâ¦.and was well capitalized. The only time I saw him really trade was when I was offering March wheat at 6.80. I was a quarter cent above the market and was offering it to keep a spread in line. The other players knew that I had size, and didnât want to go through me, and no one hit my offer.

We were all looking at the Chicago market, when it suddenly traded up a cent (a minute before, I had flashed my clerk and bought a large amount of WH [March Wheat] to cover a position there, and that uptick was my trade), and I offered more March wheat at 6.80. The kid hit my offer, saying âTake it.â I asked him how much he wanted, and he said, âAll you got!â I said, âSold 3,000,000 bushels (600 contracts).â

He sputtered, and said he couldnât take that much, but I told him that he owned it already, and wrote the trade on my card. He started to protest, but the pit committee guy, and time and sales ruled that it was a good trade.

You never saw the color drain out of someoneâs face as quickly as it did from his. The rest of the pit smelled blood and the other locals started offering the market down, then a couple of hedging companies started selling. The kid stood paralyzed, realizing that he had screwed up his short career in one stroke of ego.

He couldnât get out of the market, didnât have the talent to trade his way out of his predicament, and had no friends to help him out. Later, I found out that his clearing firm had to cover his trade and they ended up giving me the cold shoulder for a couple of days.

That day, at the close, I covered my whole 3,000,000 bushels about 2.4-4 cents lower, which was a great day for me. As for the kid, he never traded again in the pit. We used to see him sitting in the balcony for a few weeks, watching the action, haunting us for a while, then he disappeared completely. I wonder whatever happened to him.
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nokomisjeff · Dec 16, 2013

Quote from tangentShot:

I think you can make more money writing a bookâ¦ for the amateurs.
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I don't know whether to take that as a compliment or an insult.

ogarbitrage · Dec 16, 2013

Jeff, that's been a good story since the day it was on your blog.

I executed a trade several years ago when natural gas was trading above $10+/mmbtu. At the time I had a customer looking to hedge some forward production in the summer, so they wanted to sell the June-Oct strip of the current year. I believe we were late April so the balance of the summer was June-Oct.

My customer anticipated bearish inventory data coming out from EIA that day, so 1-2 minutes prior to the number, we were instructed to work the offer in the market for roughly 60 lots per month ("2 a day" in NG parlance.)

Literally 1 second before the number came out, the largest natural gas market maker at the time (and probably still is) lifted the strip for the entire volume (300 lots). He beat out 5-6 other makers who all came screaming in trying to lift any piece of it they could get 2-3 seconds later.

Inventory data instantly sent the front month and balance of summer strip up about 20-25 cents and it continued to rally. The fastest market maker of the bunch, and the guy I have consistently seen take on huge size for the last 10 years was instantly up ~$750k on a single trade inside of 10 seconds. Needless to say, he was a happy camper and proceeded to use the windfall to unwind other positions and reduce his margin throughout the rest of the day.

nokomisjeff · Dec 16, 2013

So you remember the old blog. Had to take it down, but I have all the files saved.

ogarbitrage · Dec 17, 2013

It was usually quality content and we have similar tastes in art. I took mine down too; not much upside in publishing.

nokomisjeff · Dec 17, 2013

But now I have a screen in my 9 screen set up just for Facebook. But that is friends, and few friends of friends(who do the vetting for me) in real life that I haven't met yet.

tangentShot · Dec 17, 2013

A compliment, of course!

If you don't mind, extra income from royalties are not too bad.

Amateurs love books & there're tons of them.

Quote from nokomisjeff:

I don't know whether to take that as a compliment or an insult.
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