Une femme sur le pit - Margie Teller

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Une femme sur le pit - Margie Teller

Messagepar Maw » 19 Jan 2020, 21:42

Une interview très intéressante de Margie Teller, une des rares femmes a avoir été sur les PIT(s) de Chicago.

Throughout my time in fintech, I’ve had the privilege of working with some strong female role models. However, and specifically in the world of trading, the female point of view rarely gets exposure. That’s unfortunate, as some of the best and biggest traders have been and are women.

To that end, this fall we’re releasing a series of interviews with women who have helped pave the way for the current generation of female traders. For this first installment, I spoke with Margie Teller, a former CME floor trader whose trading achievements earned her a formidable reputation, an induction into the FIA Futures Hall of Fame—and a nickname to boot.

We expect you will enjoy this series titled “Breaking Through: How Three Women Took on the World of Trading,” which presents three very successful female traders who have unique career paths and viewpoints to share.

– Kara Grygotis, VP, Customer Success

Kara: It would be helpful if you took us back to the beginning of how you got started in this industry.

Margie: Well, I fell into this industry by accident. I started interviewing for jobs out of college—I graduated from college in 1984, which was a recession year. I had a lot of fun in college, so I had a middling…I didn’t have the highest GPA, and yet I wanted to get into Wall Street. I really wanted to get into Wall Street. And so I had a wall of rejection letters, and I got one offer from O’Connor and Associates, which later turned into Swiss Bank—the greatest option trading firm in the world. I came to Chicago for the interview, not even knowing that Chicago is on Lake Michigan, and I ended up moving here. I thought I’d be here for a year or two, then get myself back to New York. And it turned out I just had a knack for the business. I started in options—I traded options for O’Connor for a couple years, and then went on a percentage deal and worked my way up into bigger and bigger percentage deals until I had enough capital to trade on my own. During that procession, I started in Eurodollar options, moved to the Deutsche Mark options almost immediately, and then went in the Deutsche Mark futures pit. All I wanted to do is get over to the Eurodollar pit because in this business, you have to follow the money. But unfortunately, in the interim, I had to have back surgery as I had curvature of the spine. It took about five months of recovery before I was well enough to be able to move into a physical pit. I moved over to Eurodollar futures, and I spent the bulk of my career in the back of that pit trading in the last nine years of the curve. The interest rate futures curve. That’s how I ended up there. And then I retired, and came back. And retired, and came back.

Kara: Seems to be a theme.

Margie: And retired again, and went over and traded the soybean crush for a little while. Which was fun but not exactly profitable. And finally retired for real in 2010. That was the last time I set foot on the trading floor.

Kara: So you retired, came back, retired, came back. Tell me a little bit about that. What kept pulling you back to trading?

Margie: Well, if you’ve ever been on a trading floor, you know what keeps pulling you back. It was the most exciting place in the world. And there’s nothing that can fill that void. Absolutely nothing. It was the greatest place to be as a kid, a young adult, and a middle-aged adult. The first time I retired was right after 9/11. Well, not right after 9/11, because I had on an enormous position during 9/11, and it was like musical chairs, and then the music stopped. 9/11 was a really quintessential moment for me. Because we knew people in the towers, and we knew people who were on the phone with people in the towers. I was in my 30s with a young kid. I’m like, “Why am I doing this? Why am I doing this?” And these people were here and doing the same thing, and then they’re gone. And the positions I had on were so big that every day I was so stressed. So I was like, “I need to get out of this, I need to get out of this.” I started shopping my position with everybody. And once you start shopping your position, you were dead, because everybody knows your position. Finally, I found someone to take the position off. And nine months later, I was gone.

I finally sold my seat, to tell the Merc that I was serious about leaving, because they were like, “You’re not leaving, you’re not leaving.” But I left. And they actually came back with a deal to induce me to come back, so that was the first time I came back. They paid me per contract to come back. So I came back and I stayed for a couple of years while the markets were still good on the floor, until they started drying up. Then I left because I quickly got bored. I started dabbling in trading on the screen, and I did that until that became really expensive. It got to be a very expensive hobby, and then I quit again. After I’d taken a couple of years off, a friend induced me to come back and trade the crush spread, which was a different floor and a physical commodity, something I hadn’t actually traded before. That was kind of fun, but I said, “You know what? I liked my retirement. It was good. I prefer not to give it away.” So I left for good.

Kara: You had a nickname on the floor: “Large Marge.” How did that nickname come to be?

Margie: I don’t actually know how it came to be. But I imagine—everybody had to have a nickname—it probably came from the amount of size I traded. At one point I was doing 10% of the volume in Eurodollars. Which was crazy. I look back on it now, the sheer hubris of it, and I’m like, “You were an idiot. You were an absolute idiot.” But once you get in, it’s like the proverbial frog in the water. You sit there and the water keeps heating up, and you don’t realize how hot the water is until there’s steam coming out around you. And at that point, you can’t get out because your positions are so big. Every day you’re fighting to maintain the price on this or that, having screaming matches, and almost fist fights. But you have to do it, because you have positions bigger than most of the banks. So every day, settlements. We would sit there and literally scream for half an hour. One tick made such a difference in your P&L, and you had to mark it so that you could try to get out of it the next day. The more you mark it your way, the more whoever’s on the other side would say, “Ugh, I’m getting tired, I’m getting tired of it.”

Kara: Do you think you could do that today, at this point in your life?

Margie: Absolutely not. You really have to think that somebody’s taking the food out of your baby’s mouth. That has to be your mentality every day. You have to get in there and scream for the trade. If somebody screws you on a trade or doesn’t see you on a trade, you have to literally be in their face. You have to defend your real estate. There were so many moving parts that once you stop, it’s very hard to get that feeling back.

Kara: Did I read that you took voice lessons?

Margie: I did take voice lessons. When I first came down to the pit, I was 22, and 22-year-olds don’t have the deepest, loudest voices. When I had the back surgery, I grew two inches. But before the back surgery, I was 5’4”, and everybody else was a monster. Every day, I would come home with laryngitis. Every day. I’d have hot tea, honey and lemon. It’s very hard to trade—especially when you’re a newer trader—if people can’t hear you. I mean, you have to be right in front of them. So I’m like, “I have to do something about this.” I took voice lessons, and there were probably eight to ten of us in the class. It was actually quite funny to hear these big guys doing all the exercises, voice exercises and yelling. But it actually worked. Because I can still hail a cab from about two blocks away.

Kara: Were they doing it for the same reason?

Margie: Yes, yes.

Kara: Was there a special voice coach for people in the pit?

Margie: There was a special voice coach just for traders.

Kara: What did they teach you?

Margie: They taught us how to emote. For example, instead of saying “sold” with an “s,” you’d say it with a “z.” If you said it with a “z,” you could say it much louder. There are all these little tricks that we learned. Another one was how to use your whole body to yell, and to not put all that strain on your vocal cords, but do it more from the diaphragm—much like opera singers. It actually was helpful because our pit was located in the very back corner of the Eurodollar pit. If you wanted to get the attention of somebody who was further forward, you really had to be able to yell. But I had the added advantage of having a high-pitched voice—my voice was significantly higher than anybody else’s. Especially when I got really upset.

Kara: What was the upside of being a woman in there?

Margie: There were many upsides of being a woman in the pit. But having a high-pitched voice, which was unusual for the pit, was probably the biggest advantage.

Kara: What else?

Margie: Actually, that was not the biggest advantage. The biggest advantage of being a woman in the pit, and being one of the few women in the pit, is that I didn’t have to have the same ego that the guys had. I could let something go and not feel embarrassed. I could just shake it off. Now, at times—and it cost me dearly—you would lose the ability to do that. But that ability to keep calm was really great. And the second greatest thing about being a woman in the pit? Women for sure are more intuitive than men. So I could look around and say, “This guy is nervous about something. I see he’s nervous about something.” He’d ask for something, and I’d think, “Okay, I know that he’s got to dump, buy or sell a ton of stuff. I’ve got to pay attention to this and figure out where my outs are before anybody else figures this out.” It was really an advantage to me. I think it was really an advantage to be a female down there. People always said, “Oh, it must have been horrible being a woman down there—it just must have been awful. They must never have let you in.” But it’s like any place—everybody gets hazed at first. They do everything they can to intimidate you and push you out. Then once you make the club, you make the club. And the bigger trader you are, the more they need you or the more they respect you. It just was not an issue after the first couple years.

Kara: What are some of your most memorable trades on the floor?

Margie: Most memorable trades. Well, you always remember the bad ones.

Kara: Right.

Margie: The most memorable bad trade I had was, there was a Fed meeting, and one of the big banks, I can’t remember which one, figured out that the Feds were going to do a rate cut before they did a rate cut. And I got picked off for 2,000 contracts in the Eurodollars. And Eurodollars went up—I got out for like 15 ticks, which was about $750,000. In two minutes. The trading was so good around it, though, that I managed to get most of my loss back before the end of the day. But that was by far the worst one-second disaster trade.

I had a lot of positions, I mean a lot of positions, that went against me badly. And then there were certain events that you just couldn’t have predicted. There were certain events that caused really big spikes in the market, or really big downdrafts in the market. It was things that were out of our control in the pit that were the most damaging in terms of trades. One example of this was when the Long-Term Capital crisis occurred. I happened to be on vacation on an island with really bad phone service. I tightened up my position and I got it down to almost nothing. But that “almost nothing” was probably 40 or 100 spreads from the first year to the second year. And those spreads cost me $25k-$50k a day. So I’m like, “I’ve got to go. I’ve got to get back.” I managed to get back home, but the spreads were so out of control. And I had been getting at them over the phone from the island, one or two at a time, and paying up like eight or ten ticks to get out one or two at a time.

9/11 is a time I keep going back to because it really was a game changer. I’m sure anybody you talk to in the trading world will tell you that. On 9/11, it wasn’t the trading that hurt me, it was that feeling of just sitting there and knowing that we were within 200 yards of the Sears Tower. Everybody thought the Sears Tower was going to get hit. I had four clerks at the time and a partner I shared clerks with. And he, right after the second plane hit, goes, “I’m leaving. You’re an idiot. Get out of here.” But I felt like I had a responsibility to the market, that somebody had to be there to shut it down because I knew we weren’t opening for five days. Well, I didn’t know how many days, but I knew it wasn’t going to be the next day, and I knew it wasn’t going to be the day after that. I’m like, “Somebody’s got to shut this stuff down.” So there were four or five of us who stayed there in the pit. I told my clerks, “Look, you can go. I need one of you guys to stay, but the rest of you guys, get out of here.” And four or five of us shut down the floor. They said what time it was going to close, and it was a ghost town. I told my clerk to take the hard copies of the trading cards, and I took the dupes. And I said, “Find anybody at the clearing house you can find. Find anybody. And give these to them personally and say, ‘you’re in charge of these, get these in.’ And then tell me who that person is and then get the hell out of here. Get as far away from the Sears Tower as you possibly can.” That was a very, very memorable day—it was horrible. I mean, it’s just awful.

Other than that, though, there are so many trades that would go your way or go against you. One of the more memorable things that happened on the floor, trading-wise, was when I traded in the back months. I would always hedge my contracts with somebody in the front months who would fill the order for me. And one time, I did a big trade, and I had a 500 lot to sell. I kept yelling to the guy, “Where’s my fill, where’s my fill, where’s my fill?” Finally it slows down, I go up and I’m like, “I need my fill.” He says, “I didn’t fill it.” I’m like, “What do you mean you didn’t fill it?” We are now 20 ticks lower. I’m like, “Oh my God, oh my God, oh my God.” He waited and waited. I’m like, “You’re held on those—you gave me a fill on them.” He waited and waited and rode them all the way back up. All the way back up! But the whole time, I’m like, “Oh my God.” Because for him, if he doesn’t get that off, he is out. He’s done. And I’m looking for the money because he’s not going to have it. Things like that happen—not often—but things like that happen on the floor. And you could always see the best of people and the worst of people when they were cornered. When they had a really bad trade. I saw some people react really, really well, and some people not well at all. But in general, most of the people down there were the most honorable people I’ve ever known.

Kara: That’s interesting. Oftentimes, people who worked on the floor were perceived to have questionable character. But you’re saying that really, it’s just the opposite, that you’ve met some very genuine people. Can you talk some more about that?

Margie: Well, I’ll tell you, when my daughter first got diagnosed with diabetes, I was in the pit. I came into work, and people were as generous as they could possibly be. Literally, they’re like, “How can we help? How can we do this?” And we started a benefit—we started walkathons right away. People just would hand me cash. If something bad happened to someone, everybody bonded together. And because trading is such a handshake business, and you have to get in the pit and look each other in the eye every day, there was no room to be a scumbag. People could be total scumbags outside the pit. I mean, who knows who was sleeping with whoever’s wife. But in the pit, a deal was a deal. And I would do business deals, and I still do business deals, with people from the floor who have transitioned to other businesses. I trust them more than I trust anybody. I have never gotten screwed by somebody from the floor. Other business deals, yes. Because they just don’t have the same type of knowing—that this person they’re making a deal with is someone they have to deal with every day. It was a very insular world. People who were looking at this world from the outside just didn’t understand it. There were a lot of people down there who weren’t educated, and there were a lot of people down there who were, quote unquote, dese, dem and dosers. But they were honorable.

Kara: Do you have any habits or rituals that you think helped contribute to your success on the floor?

Margie: I wouldn’t say habits or rituals. But I had a skill set—I was really, really good at games, and really good at simple math, puzzles and seeing how pieces fit. So I could look at one piece of the yield curve and hear something else, and then put it all together and be able to price things faster than anybody else. Which was helpful, because you always want to be the first person to the exit. You don’t need to be the first person in, but you need to be the first person out. That’s always a good trait in a trader.

Kara: Tell me, are there any particular role models or mentors you’ve had throughout your career?

Margie: Role models or mentors? Not so much in trading. I think in terms of integrity. Obviously, your parents give you that. Every pit had its own personality. Every pit had its own leadership. Some pits were nicer than others, some pits were dirtier than others. I’d like to think that where we were, in the back of Eurodollars, was one of the better pits. It was one of the nicer pits, and definitely the cleanest pit. I definitely had to go through the same turnstile every day. I actually would rarely leave the pit. I mean, during the trading day, I didn’t eat, I didn’t leave. Because that one trade that you might miss would be the trade that could bail you out of the position. So you had to be there and just wait for it. Some of the stuff we traded was so illiquid. That one trade might only come along once every two weeks. You had to be there for that.

Kara: What advice would you give to someone who’s looking to go into trading?

Margie: Don’t do it. What I did does not exist anymore. What is left is not “trading,” in my opinion. It’s much more game theory, algorithm-based. I look at what we did down on the floor as something else—we were insurers. We’d take people’s risk, they’d pay us a premium, and we’d absorb that risk and give them a hedge. I don’t think that type of trading exists any more. I don’t see it. When you have something like a flash crash and everybody turns off their machine, they’re not insurers. They’re not creating a market function. They’re trying to take their little piece off the top without giving some sort of value back. If somebody’s mathematical and they want to go into that type of world where you create the program and you beat the game, then yes, for sure—go into the trading world. But trading the way trading used to be just doesn’t exist any more. And for me, sitting in front of a computer screen all day is just not fun. I mean it was fun being on the floor. Well, not when you were losing money, but in general, most of the days it was fun. And it was social, and you know, people would joke around. You were rarely fighting against other locals. Everybody needed everybody else. I mean, you would fight for trades against other people, but you needed everybody to succeed. You wanted the customers to succeed. You wanted the customers to get a good fill and come back. And keep the market going, and keep the market in Chicago, and keep creating value here. So the more volume we had, the more money we’d make. It’s just a numbers game.

Kara: What’s keeping you busy now?

Margie: Well, I’m working on a bunch of stuff. I’m working on a benefit for diabetes. When my daughter got diabetes, she was 18 months old, and now she’s 21. I am chairing our tenth event, and it is on September 23 of this year. The theme is Mission: Possible—it’s a Bond theme-type of party, part of the Friends for the Cure foundation. And we’re trying to raise $750,000 at this party to benefit University of Chicago Medicine Kovler Diabetes Center. So far, our group has raised—before this event—$3 million. It’s all for diabetes research, because it’s a really terrible disease, and I would like it to be over for her and millions of other people who suffer from it.

Part 2

Kara: In addition to Friends for the Cure, your foundation for diabetes research, what other projects do you have in flight?

Margie: I just finished a novel titled Front Runner, a financial intrigue story with a touch of romance. I’ve been working on it for just about 13 years. It is now officially a period piece. So that is done, though it’s not published yet. And the thing that’s really taking up a lot of my time now is a TV pilot I’m working on about the trading floor from 1986 to probably about 2005. I’ve been working on that for about 18 months. The pilot should be written within the next six weeks or so, which I’m excited about.

Kara: That’s pretty cool.

Margie: And then we’re doing it on spec, so we’ll see where it goes. If anybody has stories, contact me. Because there’s nothing better than the real thing. The truth of the trading floor is definitely much more interesting than any fiction you could create.

Kara: That’s exciting. I’m sure there are plenty of interesting stories that would make for good TV. Do you have any advice for someone transitioning out of trading?

Margie: It’s a really tough transition unless you have…the means. My advice would be to follow something that you really, really always wanted to do. And do that. Follow your heart. Do things you never thought you’d do. Because for those of us from the floor, it’s very, very hard to work for somebody once you’ve been on the trading floor.

Kara: I can imagine.

Margie: You’re not really allowed to call your boss the names that we called each other down there. The other advice would be, if you can do it, have some sort of company where you’re in charge. The thing that most people from the floor don’t realize is that they were running a business. You ran a real business. You had payroll and you had people. You have a skill set that you don’t know you have.

Kara: So you just finished writing a book. Are you reading anything particularly interesting?

Margie: Well, I love trashy novels. I also just read a book about Russia, about when we put the Magnitsky Rule in effect. And that book was really, really interesting. If I could remember the name, I’d tell you.

Kara: I can look it up. [The book referenced is Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice by Bill Browder.] What was the thought that ran through your head when you first heard the news about the floors closing?

Margie: I think it was actually worse watching them dissipate. It was really sad because it used to be the most vital place in the world, and everything came through there. News events would come up on the screen, and we’d see them first and react to them. It was kind of like being in The Wizard of Oz–the floor was color, and other things were black and white. They weren’t dark, but I’d wake up and it wasn’t like going to work. I was going in, and some days I’d be like, “Oh my God, I have to do everything. This is the mad scramble–I have to do everything I can to try to scratch this day,” because you start off so down. And other days, you’d go in there and everything would go your way. But those were once every millennium. I think that for a lot of people, there were a lot of marriages that disintegrated down on the floor. Probably much higher than 50%. I don’t know how a marriage could compete with that feeling of being on the floor. I used to carry a beeper around–you know, before there were cell phones–and we’d get market alerts. I was married at the time, and I’d be on the plane with my ex-husband, and literally swipe the credit card, and try to bail myself out of a position over the phone. In Singapore. On a plane. White as a ghost. There are bad times, but then the good times are great. Everyone would get so excited. When things are good, everybody’s happy. And when things are bad, you’re at home in a fetal position, and you don’t want to talk to people. It was a very unique world.

Kara: Do you still follow the markets now?

Margie: Oh, yeah, of course.

Kara: You were talking about how, in the pits, you were “insurers” of the market. How do you view the markets now, since it is very much electronic? Is it all smoke and mirrors? What’s your perspective on the integrity of the markets?

Margie: I don’t think that people care one iota about value. You can’t pick an individual stock and say, “Oh, well, Apple’s earnings are going to do this, and you’re going to do that, and they should rally, and they’re undervalued.” That doesn’t matter because everything is the index. If the index goes up for whatever reason, then Apple goes up. If the index goes down for whatever reason, Apple goes down. I just don’t understand how people can trade and think they have any edge whatsoever given the market’s integrity. I just keep going back to the flash crash. The market has buy orders and sell orders until it doesn’t. The crash of ’87–which was not right when I first started, but soon after–was a prime example of how we were insurers for the world. We put in prices. They might have not been prices people wanted, but we put in prices and orders got filled, and we didn’t close and the markets stayed open. And shortly thereafter, the markets rebounded and came back. But I don’t know if that happens here, if we have some sort of shock. It scares me to see that happen. There’s flight to quality, you know? We used to have flight to quality when a flight to quality meant that things could actually rally. When the rate is at 2%, what’s a flight to quality? It’s just a totally different world.

I don’t know how traders actually fit into this world. I just saw on the news that the market’s at historic highs, but Wall Street has cut 20% of its jobs this year. Which is ten years after we did the same thing. At one point, there were probably 25,000 people employed on the floors. I’m not sure, between all the trading floors. And most of those jobs were really, really good jobs. And now they’re nothing. There’s nothing. There’s a few people upstairs who program. There once were 25,000 people who could not only feed their family, but buy houses and do all this other stuff, and it’s just gone now. And I think that trading is only the first of the industries that are going to be disintermediated because of technology.

Kara: Your whole career has been very much a Type-A, very much on, environment for you. So now that you’re retired, you’re doing all these things, but how do you find peace? Personal peace, that when the day is done, you feel good.

Margie: Like I did something?

Kara: Yes.

Margie: I think doing charity work, for me, is very important. It makes me feel like I am helping the situation. Especially when it’s your child, for example. That takes a lot of my energy and a lot of my time. Trying to create this TV pilot, bringing this world to other people, I think is important. It’s important for other people to see what this world was like. Because it’s such an integral part of Chicago’s history, and so few people know exactly what happened there. It was so interesting. There were so many dynamics involved on the floor. It wasn’t just the guys in the pit. It was the Leo Melameds, and the Jack Sandners. People who were creating this world, only to take it away when they saw the tide turning. They created all this opportunity, and then they said, “You know what? In order to preserve the money for the investors, we’ve got to take it away.” It took me a long time to be at peace without needing the markets. I stopped watching the markets, literally didn’t watch the markets, for a number of years. Because things just seemed insane. But then I started itching and I wanted to trade again. We have days like today, when the market is down quite a bit, and volatility is spiking, that type of thing. I’ll watch the market because I do have money at risk in the market. But in general, I try to avoid it because it’s not healthy at this point in my life. Because you can’t go back. Every time I went back to trade, I tried to trade the same way, and at first I tried to trade small. But once you trade big, you can’t trade small. You just have this–I don’t know what it is–some sort of image of yourself. And then when people find out that you actually were a big trader, they come to you and they need you to fill that void. Which would not be the same for me if I were trading equities or something on the screen. It’s just not interesting to me unless there’s actual money at risk. It’s the same as anything: if you’re risking $1,000, then I’m just sitting in front of a screen and wasting my time when I could be out enjoying a beautiful day in Chicago.

Kara: Was there anything you did when you were trading on the floor to de-stress? Or after a hard day, how did you decompress?

Margie: When I had a bad day, I literally would come home and crawl into bed in the fetal position. I mean, literally. Which is really not good if you have a small child. If you had a really horrendous day, and then you had to do that for half an hour, then pick yourself up and try to be a normal person, and try not to take it out–try not to be as distracted as you actually are, thinking about everything that happened. I remember going home after a bad day and bringing home my dupes, and going through every trade to see what I could have done better. How I could have avoided this mess. And then I’d go through it all and figure out what to do so it wouldn’t happen again. And of course it happened again, and again, and again. But it was a very different lifestyle. I think to trade at that level is a very unsustainable lifestyle. Which is what happened to me after 9/11. It just became too much.

Everybody from the floor misses it so much. I talk to so many people because I want to get their stories, and I want to hear everything. For nearly everybody, it was their youth. It was the most vital point of their lives. I feel sad for people who never got to experience that feeling of being at the absolute center of the world financial system. And being a part of it. People would go out and have fun–and the stories. Everybody had a great sense of humor down there. It was so quick. And people had zero filter. There was no correctness. Which meant, as a female down there, you had to learn to let this stuff roll off your back immediately, you know. No crying in baseball.

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