Alan Knuckman Reflects on His Journey from Michigan to Chicago’s Trading Floors

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John Lothian

John Lothian

Executive Chairman and CEO

In a recent interview for the John Lothian Profiles video series, veteran trader Alan Knuckman recounted his path from a small mining town near Lake Superior to the bustling trading floors of Chicago. Knuckman’s story is one of perseverance, adaptability, and a deep understanding of market psychology, shaped by his early life experiences and career transitions.

Growing up in a town reliant on iron ore mining, Knuckman was exposed to the cyclical nature of commodities from a young age. His grandfather, a loadmaster, was integral to the iron ore industry, loading wood pellets onto boats that would traverse the Great Lakes to Indiana for steel production. This early exposure instilled in Knuckman a keen awareness of booms, busts, and the intricate workings of commodity markets.

Knuckman’s academic journey took him to Michigan State University, where he majored in advertising. He initially aspired to a career in broadcasting, but his plans shifted due to the Gulf War’s impact on the job market. Relocating to Chicago, Knuckman found himself drawn to the exchanges, a hub of capitalism and opportunity. His physical stature—tall enough to stand out in the trading pits—earned him his first job as a runner, a role that paid a modest $2.35 an hour.

The runner’s job was a high-energy, physically demanding introduction to the trading world. Knuckman described the process as “amazingly efficient” despite its reliance on hand signals and paper tickets. This system, in place for over a century, facilitated millions of transactions with remarkable accuracy.

Knuckman’s journey continued as he transitioned from a runner to a phone clerk, then to a floor trader. His career path was marked by the need for resilience and strategic relationships, as he navigated the high-stakes environment of Chicago’s trading floors. The era he describes was one where traders were revered, enjoying significant social status and financial rewards. The physical and psychological demands of the trading pits shaped Knuckman’s understanding of market dynamics and human behavior.

A pivotal moment came when Knuckman moved to California to work in commodity options, leveraging his Midwest upbringing and understanding of resources. This experience broadened his perspective, introducing him to the world of marketing and client education in futures trading. Returning to Chicago, Knuckman continued to build his career, now focusing on stock options and using his media skills to provide market commentary.

Knuckman emphasized the evolution of trading technology, which has democratized market access but also introduced new risks. He highlighted the importance of discipline and risk management, contrasting the methodical nature of trading with the often sensationalized portrayal in financial media.

Reflecting on his career, Knuckman remains passionate about educating others, advocating for the use of options as a strategic trading tool. His message to aspiring traders is clear: turn off the noise, stick to a disciplined plan, and view trading as a methodical, albeit boring, pursuit with the ultimate goal of financial success.

 

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