A popular watering hole adjacent to the Chicago Board of Trade called the Cactus Club that was populated by young bond futures traders and trading clerks used to sell a t-shirt cautioning, “Don’t drink and trade.”
It was put out in jest and probably not always adhered to but the underlying theme made a lot of sense. Trading is an emotional exercise—especially for those in the heat of the action inside the now antiquated trading pits—where judgment is extremely important. It is easy to let those emotions overcome you in the heat of the action as it is, let alone if your judgment is impaired by alcohol or drugs.
I thought of this when hearing the story of a rogue London energy trader who may have been over served—on something—when he entered a series of large positions in overnight trading in Brent Crude oil on the ICE Futures Europe electronic platform.
It brings to mind a danger in our new world of trading and work. In the old days it was simple, you went at it hard for a relatively short work day and then the bell rang. And then you went at partying, by the way, with just ask much gusto. This was particularly true of traders who tended to be young and have quite a bit of discretionary money.
One of things that that I liked most about working on the trading floor was that no matter how hard or stressful of a day I had, when the bell rung, it was over. Now trading is a 24-hour activity and it is oh so easy to flip open your laptop sign in on start trading. Lose some money—well I will just make that up. And so on. Like the gambler who tries to make it all back on Monday Night football. But every day and every hour the game goes on.
There was a reason that markets where only open for so long—it was too intense of an environment to be at it non-stop for a full work day. With 24-hour markets traders need to make their own limits and adhere to them.
Tags: rogue trader
