Great Moments II
Floor Broker “Whitey” would lead a spirited singing of The National Anthem before the opening. It was an opening indication that this place wasn’t going to be a normal trading floor.
More firms had a booth on the floor on Opening Day. The firms figured out quickly that they weren’t making money, and it didn’t look like they were going to make any money, so they left the floor. A lot of the accounts went to Coast or Casey. There had been some optimism around Opening Day, but reality started to sink in fast.
Years later, when traders were showing up at three in the morning to get their good spot in the pit, I thought about the absurdity of OBOs taking attendance at the opening. Attendance was recorded on a sheet and handed in daily to the Exchange. There was pressure to make sure someone would be there for the opening and through the day to update screens. Most traders wanted to make the opening anyway, but some figured out they could just “take the fine.” I can’t remember the fine schedule.
One pit, X02, was the only “real” pit on the floor. Santa Fe Oil (SAF) and ABC did trade. The Exchange decided to “split the pit” and move ABC to its own pit with some other new stocks. It would be right next to the SAF pit on the “back wall.” The Exchange was trying to spread the business out a little bit, and was hoping that with more attention one of the other stocks would get busy.
Market Makers in the X02 pit were outraged. They had positions in both stocks. How could they possibly watch both pits? It would be laughable later when traders had positions all over the floor, but at the time it was a big deal and a bitter battle. Market Makers talked about the impossibility of watching one position from another pit. How could they ever get trades in the next pit? They were going to sue.
I think there was a meeting about it after trading. The pits were split up. Later Advanced Micro Devices was listed and added to the ABC pit. I remember we laughed at the name.
I do remember “meetings” held after the close on the floor. Why wasn’t there more business? Floor Brokers said the markets were crummy. The markets were too wide. There was too much fading. The Market Makers said the Brokers were at fault. They just stood around all day, or sat in their booths. They should be drumming up business, or pressuring their firms to send more business to the PSE. (Right, and get fired.) What came first, the chicken or the egg?
Markets were changed one by one by a Market Quote Terminal Operator, the MQTO. The at the money and near term series were usually updated, but some of the other months and series that didn’t trade much would be neglected. Then some firm would come in to trade them. “But it’s on the screen!” “Go ahead and trade with the screen.”
One of the big differences in trading on the PSE was that every trade would have a buy and sell ticket that would be stapled together and put in the ticket box to be checked by the OBTO and the last sale put on the screen. The CBOE and The Board of Trade operated on the system that the seller reported the trade. Sometimes the honor system didn’t work. A buyer could get out of a trade by claiming he was trading apples, while the other guy was trading oranges. But, the system did work, because besides the “word is your bond” aspect, if you had out trades too often with another trader, you just didn’t trade with him. Brokers might not hear the traders that had previously burned them. They also had little groups inside the pit that knew and trusted each other. They’d all trade with a broker together and so had witnesses when there were out trades. They’d all be on the same ticket.
When a trade was done on the PSE both buyer and seller filled out a ticket and it was stapled together. It was harder for some of the scummier traders to cheat. Guys would hold onto tickets to see what would happen. They’d try to get a little free “look back.” It was a small minority of traders that pulled stunts like this. “Oh, I thought you were trading Diamond Shamrock, not Levi.” “Oh, I thought you said ...” Later, there would be specific instructions from firms: “If you have to trade with him, get the ticket! Don’t let him put the ticket up.”
I do tend to dwell on the negative. Most traders were honest. “Your word is your bond” was still important, stapled together tickets or not. There were stand up traders. Most did want to trade and make money. Like the CBOE model, most pits had what was called a “pit boss” by some. There was Jim French in Santa Fe. Al Zimmer. Mike Engman and Sid Ornstil in Levi. Barry Leonardini.
When was a trade “consummated?” When was the deal done? Was it when someone made an offer and someone said, “Buy ‘em.” Was it really when the ticket was in the box? Most of this was handled during the pre-opening simulations, buy there would still be long discussions later.
Almost anything could start an argument in the early days. This was important stuff. It would be the precedent for years to come. Sometimes trades attracted more kibitzers than actual participants.
There was an argument over where the “news tape” should be placed on the floor. There was a long discussion about what side of the ticket should be time stamped, especially behind the book. It should be standard. What if there are hundreds of orders to be stamped? (An unlikely possibility, but always looming. What if we really did get business? What then?) I don’t know if the word ergonomics even existed back then. This discussion seemed to go on forever with the book staff. “What if the guy is left handed?”
There was a machine that printed out news stories. If there was a story about a stock on the floor, or in a pit, someone would go over, or send a clerk to rip the story off the ticker tape machine. I remember there were arguments about getting to read the story.
Another quaint custom of the bygone era was “not calling someone else’s customer.” If it was a broker’s customer, you waited until the customer got mad about something. Then, you’d wait for the customer to call you. It was considered bad form to contact a firm and solicit their business. It wasn’t even a rate thing. It was just some unwritten rule. I’m not sure if this was a West Coast thing.
Maybe it was just a courtesy. I remember guys talking about someone, “Calling someone else’s customer.” I think Shuman Agnew was the victim firm. They did eventually leave the floor. I can’t remember the exact circumstances. Like other firms they may have just given up on the PSE floor as any kind of money making possibility.
There really wasn’t much paper in those days, but there was still some semblance of honor among thieves. Maybe professional courtesy is a better way to put it. Traders were encouraged to stay in one pit, their Primary, and could be fined if they traded too much in other pits. Some guys did just stay in one pit. They didn’t take shots in other pits. Sometimes the shots didn’t work out anyway. You should just stay in your own pit and trade what you know. This of course changed over the years as traders migrated to wherever the action was. “The Boat People” were born.
There were two news tape displays on the floor, but if I remember right, the one on the South wall near the Levi (LVI) pit wasn’t working. A story about Levi came across the tape. I can’t remember the exact story, but it was very Bullish. I’m pretty sure it was something about earnings coming out that were much better than expected.
Members of another crowd read the story on the news tape near their pit. The big berry in the LVI pit that day was the Oct. 35 calls in the book. I can’t remember if it was a thirty lot or a fifty lot. They charged over and bought some books. Since the order was in the book, they could see it from the other pit and of course bought that first.
The regular, local members of the pit quickly figured out what happened and were literally hopping mad. Guys jumped up and down swearing, and called for “Floor Officials.” There wasn’t much paper around anyway, so they were missing out. I certainly can’t remember who the Floor Officials were that answered that call. They were sympathetic. It was scummy, they agreed, but there was nothing they could do.
Ben Rosofsky was a Broker in the Levi pit and was as vocal as anyone about the trade. It was a rare day he didn’t get in a beef of some kind, and was cited often. The citations built up. Later he had a backer who wanted him to trade on the CBOE. The CBOE looked at all the citations, and gave him a hard time (or just refused) to make him a member. He moved to Chicago, and I didn’t hear much about him for a couple of years. In the early Eighties we heard he was convicted of bank robbery!
I couldn’t believe the story at first. It had to be some other Ben Rosofsky, but no, it was confirmed. Someone said he had a coke problem, but I had my doubts about that. He always gave us a hard time for smoking. He made a big deal that, “I just drink beer.” Then again, it was the early Eighties. Everybody was trying it. He was mentioned in an Almanac for being one of the dumbest criminals of the year. He robbed a bank in Alameda. Alameda is an island with only one highway road to get on or off the island on. In the Nineties a trader told me about getting a taxi to work that morning. “Did you know a Ben Rosofsky?” The driver told him he used to trade on the floor.
Some CBOE Market Makers planned to trade in San Francisco during the winter and in Chicago the rest of the year. They could escape the winter and still get the trading action on the CBOE. Guy Helmstetter and Paul Espanshade did this at first. Espanshade was a size IBM trader.
We were learning about the Bay Area outside of the Exchange too. We tried to get in as much tourism as we could. We didn’t think the Exchange would make it and we’d be back in the Midwest, but we would have our California adventure. I remember we’d go to Sonoma after the close on a “school night.” We’d visit the Hacienda winery and think nothing of driving there for an afternoon.
We had been told that Halloween was a holiday for adults in San Francisco. It wasn’t for kids. We were told we had to check out Polk Street on Halloween. It was the big Halloween party back then. Later it drifted to The Castro.
Polk Street was about three blocks from 1244. We went to an Italian restaurant on O’Farrell. It was a little shaky around there then, but not the Tenderloin. We sat at a table in a window. None of us were in costume. A group of nuns came by. Guess we had that tourist look about us. These nuns had mustaches and beards. They pressed their faces against the window to freak us out. They put on a show, dancing, groping and leering at us in the window. I’d seen people in drag before in Chicago. There was that whole platform shoes glitter rock thing, but these guys were different. There was something more jarring about nuns with mustaches and beards. (They could have been The Sisters of Perpetual Indulgence. Not too many were doing the nun in drag thing back then.) And, they were doing it in the street, not in some dark night club.
It was just the start for the evening. There were thousands on Polk Street partying in the street in drag and costumes. (Some of this can be seen in some home movie footage on YouTube.) There was a beauty pageant on a stage set up in the street outside a Disco. Polk Street was jammed with people partying. It was one of the first of many unique Bay Area events for us.
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