Where Will Tomorrow’s Traders Learn the Ropes?


There is an inside joke among those of us who have worked on the trading floor of Chicago’s futures exchanges and it has something to do with trying to explain the markets and trading floor to family members and significant others.

It is a difficult and taxing process and it probably explains why so many industry titans started out at the very bottom rung as a runner and worked their way up. And while it is encouraging to see several prominent universities build out futures trading related programs, most of us deep down knows that is not the best way to learn about these markets. This is a problem for the industry because with the trading floor all but dead, where will tomorrow’s traders come from?

Yes I know many prop firms believe from young kids growing up with video games and texting before they can read but there is a lot more to the industry than PlayStation console abilities.

As they say, back in the day; a college kid interning for a summer at the Chicago Board of Trade or Chicago Mercantile Exchange, would not only learn how to run orders into the soybean pit. He or she would learn to watch all the markets on the massive boards surrounding them. He or she would learn to watch news feeds for important economic reports or weather forecasts. He or she would learn that some traders insist on having all this information at their fingertips while others could care less and simply watch price. He or she would at some point learn that certain customers skate near the edge of their accounts and must be monitored at all times. He or she would learn the mechanics of how an order goes from point A to point B to point C and how it all fits together (it still happens today inside a match engine and understanding the steps is still important). He or she will learn how what appears to be an innocuous error can mutate into a huge problem that can cost a great deal of money and perhaps someone’s job, and hopefully how to handle that small error so it doesn’t become a big one. They would see slow markets and fast markets and markets that explode into a frenzy on a moment’s notice thanks to one bit of news.

They would learn to deal with difficult people and also find extremely generous people looking for someone willing to learn. Importantly they will learn that people –including themselves—react in all sorts of different ways when they come under stress. They will discover whether they like the stress or perhaps like some other element of the markets.

It is an issue for the industry that this tremendously valuable training ground is slowly going away. We don’t know what will replace it but there are folks looking for an answer.

This week offers one possible piece of the puzzle as newsletter writer John Lothian is launching the initial Marketswiki World of Opportunity Summer Intern Education Series, which will feature some key industry leaders who will be speaking about the history of the markets. There will be five sessions spread out throughout the rest of July. Appropriately, CME Group Chairman Emeritus Leo Melamed will be the first speaker.

The goal is to “introduce the history, innovation, key leaders and future opportunities to participating interns, summer workers, new employees and those interested in careers in trading and markets.”

It is not a charitable endeavor as there is a small charge for each event. There are a lot of a solid speakers encompassing decades of experience in the markets. While listening to important people talk about their exploits and experiences is not the same as seeing the drama unfold before your eyes, it should be valuable and perhaps more importantly, it could spark other ideas for ways to recruit and educate the next generation of industry participants.

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