
Trading: What happened when the pit stopped - minimax
http://www.ft.com/cms/s/0/4d221b22-3dfb-11e6-8716-a4a71e8140b0.html
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chollida1
3 interesting take aways from this article for me:

> By her twenties, Ms Rifkin, who did not finish high school, was earning six-
> figure pay.

I've never heard anyone call pit trading a meritocracy but it was one job
where people who didn't have the best pedigree could still get a very good
paying job. As is pointed out every day there are fewer and fewer of these
types of jobs around anymore in the North America. I think real estate agent
and sales are the two jobs that immediately come to mind as jobs that people
who don't have a university education can still make great money with.

> Electronic futures trading arrived in 1992, when the Chicago Mercantile
> Exchange launched its Globex technology. Nymex followed a year later with
> Access, short for American Computerized Commodity Exchange System and
> Services. But access to Access was confined to hours when pits were closed,
> to protect the value of seats on the floor, Mr Collins says.

Even when given an, IMHO, obviously superior technology the incumbents were
able to hold it off for the better part of a decade. I always try to keep this
in the back of my head when trying to predict curve jumping shifts in
behaviour, just because you think something is superior to the incumbent you
can't assume that it will immediately replace it. Or put another way its
dangerous to short the incumbants on the thesis that new tech will immediately
replace them, the old guard can be very sticky.

> GEM’s 17th floor office off Columbus Circle in midtown Manhattan contains
> just five traders on a recent afternoon, with a few more patched in by video
> feed from offices in Chicago and Dublin. The room is quiet but for the hum
> of the air conditioner, brokers quoting oil structures over speaker phones
> and the bleep of trades being executed, often driven by algorithms.

> Mr Vonderheide’s employees studied physics, economics, chemistry and finance
> at top US universities

> “A friend used to say, ‘If I weren’t trading gasoline, I’d be pumping it’.
> Well, some of them are.”

These are the people who replaced the pit traders. If you contrast them, a
successful pit trader tended to be loud, big, boisterous and outgoing. When a
shift does happen as the shift from pit to computer did, the new guard tend
not to resemble the old guard very much and the old guard tend not to fair
very well.

~~~
danso
> _I 've never heard anyone call pit trading a meritocracy but it was one job
> where people who didn't have the best pedigree could still get a very good
> paying job. As is pointed out every day there are fewer and fewer of these
> types of jobs around anymore in the North America. I think real estate agent
> and sales are the two jobs that immediately come to mind as jobs that people
> who don't have a university education can still make great money with._

Maybe among white-collar jobs, but vocational jobs, such as welding, could
bring in a lot of money to the talented craftsperson without a degree.

~~~
fapjacks
Absolutely! At least in the States, we have this stereotype beaten into our
heads that vocational jobs are not desirable. Even when we can look around and
see that -- especially in places like the midwest -- the people with an
enormous mansion home and a nice boat are usually the general contractors
running a business, which itself pays the welder a hundred dollars an hour.

------
tener
It feels like the article was dictated by someone with a very strong agenda so
that it reads "good, simple people found fortune trading oil and now evil
computers took their jobs".

It fails to ask a number of key questions like:

1\. Why unskilled random people were able to earn significant money as
traders? Why is their background an excuse for inequality they were part of?

2\. Who was financing their crazy earnings? Surely money didn't appear out of
thin air?

3\. What was the motive to hire those random people? My best guess: whoever
was sponsoring their seats wanted to have a trusted partners to gather intel /
pull of a scam. Either way, not exactly pretty.

4\. Who exactly is now profiting instead of the old traders and how does it
affect the other participants of the market?

I do wonder which PR company is behind this article and what is the ultimate
motive of their client.

EDIT:

A) Forgot to add the note about deceitful graph of "New York City jobs ..."
which looks like the number of jobs goes almost to zero, except it has a base
level of 90k.

B) Interestingly Mr Ardizzone was sued in 2011 for an alleged scam [1]. This
would support my guess from point 3.

[1] [http://www.reuters.com/article/us-arcadia-lawsuit-
idUSTRE74P...](http://www.reuters.com/article/us-arcadia-lawsuit-
idUSTRE74P7VU20110526)

~~~
danielvf
Actualy, it looks that article show Mr Ardizzone suing two people for
fruadulant activity, rather than being sued himself.

