Anecdotes
In the trading pits of the CBOE a runner made a play
“I had to take him to the horse.”
I couldn’t believe it…my MD had a rap sheet.
While not the worst registered offender list you can be on, typically a u4 isn’t great. They cover customer complaints, criminal charges, and regulatory actions to name a few. Rare is the disclosure that can advance a career.
***
“We trade millions of dollars down here based on nothing more than your word. Your word is everything and without it, you are nothing.” It was my first day on the floor of the CBOE and my trader, YRO, was explaining the unwritten rules. “Integrity is everything. Outtrades can cost millions of dollars. Keep a good rapport with people in the pit, but don’t be a pushover.”
***
The horse was the ultimate call out on the floor. If words couldn’t resolve your problem, a trader could publicly invite you to physically adjudicate your dispute at the horse statue that sat just off exchange property.
The u4 read clear as day: “I was involved in a fist fight with a fellow market maker. The incident occurred off exchange property but was public knowledge. A fine of $2500 was levied against both of us in return for a guilty plea. The matter was closed with no further action.”
For my New York coworkers, a physical dispute may have been seen as uncouth. For a guy with Chicago roots who had lived it, I appreciated the exchange floor culture and the message this sent.
Don’t mess with Fancy or any of the other floor guys.
***
Dora Leal was a 43-year-old runner in the OEX pit. One of the larger, more raucous pits on the floor of the CBOE, the OEX guys were animals. Standing with my back to the pit while I clerked the MNX, I caught more than a couple errant trading cards to the back of the head that had been flung at other OEX traders.
Being a runner was an entry level, low paying job that entailed collecting non-weaponized trading cards and entering the trades into the reporting systems.
The runner would run between various pits doing this job and to the untrained eye, they could be mistaken as exploring the floor. That, combined with an uncanny likeness to the cartoon, earned her the moniker Dora the Explorer.
Every week, a group of 16 OEX traders would pool their money to play the Mega Millions. It wasn’t for the expected value so much as it was for avoiding the pain of knowing that the person next to you just won the lottery and you must show up to work tomorrow.
It was the last trading day of the year and the traders had sent Dora the Explorer downstairs to check the communal lottery pool.
Scanning tickets one by one at the A&B Tobacco kiosk, the results were standard.
Miss.
Zero.
$2.
Loser.
$6.
Zero.
And then it happened.
Triumphant music emanated from the kiosk as Dora the Explorer scanned a winning ticket for $175,000.
The adrenaline coursed through Dora’s veins as if she had just been legged on a high delta options trade. She was about to make or lose a life-changing sum of money based on her next move.
Not understanding the nuance of the situation, the clerk congratulated her with a high five. “You better sign that now so you don’t lose it,” he told her while offering a pen.
Decision made.
Returning to the pit Dora informed the traders of their expected lackluster performance. “Little less than $20 bucks…I just rolled them into the next week.”
Unfortunately for Dora, the adrenaline rush in the bodega rendered her blind to the Wolverine trader that was standing behind her and saw the whole thing. Needless to say, everyone was surprised when he came up to congratulate the pit on their winnings.
An out trade is one thing. Consciously trying to steal money from a group of floor traders is something else entirely.
Among the choice words hurled her way was an invitation to the horse – a first for a woman. Within 20 minutes Dora was exploring new career opportunities and we never saw her again.
She surrendered to the police shortly thereafter and was held in Cook County Jail on a 25k bond.
It wasn’t until a couple of years later that the trial came to pass. Dora was given probation with credit for time served and a fine. The traders were able to claim their winnings based on a photocopy they had taken prior to the drawing.
The ticket was never found.