Great Moments in PSE History

The first citation was given to Wayne Siepman for “running on the floor.” Wayne was a large man. Running on the floor for him was an absurdity. “Running on the floor” had been defined as moving in a manner that would displace other persons. John Brown Sr. was a buddy of Wayne’s from OTC days. He wrote the citation. I’m not sure, but I think he was the Chairman of the Floor Trading Committee that first year. He told me later that, “They had to break the ice.” The Committee didn’t want the first citation to be the result of some trading or political vendetta. It was still some of the fiendish JB Sr. humor at work.

The PSE had a party at the St. Francis Drake to celebrate the opening of the Options floor. What a different era that was. The Exchange paid to rent a ball room at the St. Francis for a party. The Chicago contingent, as usual back then, acted like a bunch of barbarians, even though many of us were employed by the Exchange at that time. There was some speechifying by PSE bigwigs. There was even a skit. (Have to wonder who’s idea that was.) Members played out a crowd scene. Sam Mora wore a fedora and played some sinister, bullying CBOE market maker. He had come West to rip everybody off. “I’ll do size!” It was an odd scene in a simpler time. There was some smoking of a smelly vegetable like substance. I saw some PSE executives leave in a huff. They had expected a more sedate scene.

It’s hard to remember how slow it was back then. It’s lost in the selective nostalgia. There was some trading. There was a lot of jockeying back and forth between market makers. There was some action at the Santa Fe Oil (SAF) pit, which also had ABC in the early days. Some of the stocks that were only listed on the PSE did OK, but the dual listings were largely a fiasco. There was some trading at the Teledyne (TDY) pit, even though it was a dual listing with CBOE and AMEX. It was slow though, like watching paint dry. During the slow, boring trading hours, Market Makers started comparing the size of their positions. “Oh yeah, I’m short a hundred!” They pulled out their sheets to prove the balance they had in their accounts. “Oh yeah, look at this!”There was some kind of financial macho thing going on. Let’s put it this way, they didn’t do that on the CBOE. There was an odd rivalry between those that cleared different clearing firms. First Options vs. Goldberg.

We watched the public trade through the PSE on almost every order of the dual issues. Market maker Sam Anderman was about 70, and he was dedicated to getting PSE Options off to a good start before he retired. He set every market in the stock options of Merrill Lynch a teeny or an eighth better than the other exchanges. The orders were still going to the other exchanges and getting filled at the worse price. I think there were excuses like, “We didn’t know if you were really there, so we sent it to the CBOE.” Most of us thought the PSE was doomed. We’d have a year in California and then go back to Chicago with our tails between our legs. But we’d have our California adventure first.

One slow day I was passing the Teledyne book on my way back from break. I knew something was up. Irv Bookspan was always looking to make some extra cash, usually by making some crazy bet.

I don’t know exactly how this bet started, but I’’m pretty sure Doug Berman was one of the instigators. The proposal: Irv Bookspan, then a member of the OBO staff would bite Kirk Mann, another OBO staff member, on the butt. On the floor. During trading. But, it’s got to be a real chomp. I’m not sure if the payoff was going to be $20 or $50. It didn’t matter.

Kirk Mann was a nice guy from Sonoma. I don’t know how he wound up at the PSE, but he was one of the few who didn’t either came from Chicago or had some kind of market experience. He was a laid back California guy who thought the whole Exchange thing was crazy. Irv was from San Diego. He later instigated a diet weight loss bet with about a dozen guys, even though he didn’t have much weight to lose. (Another story.) He had also gained some notoriety in his hometown for eating a cow’s eyeball to win a bet.

So, here’s this clerk standing there “checking the book” going over all the orders to make sure they’re filed in the right place and with the right size. He was updating the backup cards by writing the volumes and prices of the orders and making sure everything is filed correctly. (How’s this for ancient obsolete technology?) You’ve got to have clean, neat back up cards showing all the orders in case something actually trades and the next bid or offer can be entered and put on the screen by the OBTO. A few of us knew something was up, and watched. It was a slow day, so Irv had to use some stealth to get near his victim. He got down on his hands and knees and snuck up on Kirk Mann by going around the PRTO terminal that was behind the book.

Irv struck and made sure he got a real chomp, and leave no doubt that he deserved the cash. Kirk Mann jumped and let out a yell that was more like a yelp. You could hardly blame the guy. It had to be the last thing he expected while standing on the floor of a stock exchange. There was a quick explanation, and he took the joke with good humor. He thought we were all nuts anyway. He seemed all right with Irv making the money.

The bet was a big topic of conversation for years. KIrk Mann left the floor. It wasn’t the butt bite. He thought the business was too frantic and crazy for him. Irv worked on the floor for years. He was later the founder, with Doug Nunn, of The United Lunch Company. He made more crazy bets over the years, including one that he could memorize a page of the phone book.