Trader Moved Off to Floor and Helped Start Hundreds of Traders’ Careers
Veteran trader and FCM executive Norm Singer was interviewed for the Open Outcry Traders History Project by John Lothian News.
Singer graduated from Southern Illinois University with a degree in psychology and was looking for a job. But he did not want to go back to school to get the education required to practice psychology.
A friend told him to check out the Chicago Board of Trade. The memberships were $43,000 at the time, and his father-in-law lent him the money to buy the membership.
Singer was in the chicken pit, also called the iced broiler pit, at the CBOT, a non-regulated commodity at the time, he said. The regulators did not care about this market, he said.
Singer said the chicken pit was funny. There were five traders in the pit.
His friend who had the broker’s deck didn’t really know how to handle the orders, Singer said. Sometimes trading would have to be stopped in the pit so the broker could put all the orders on the floor to pull out the orders that needed to be canceled, he said.
Singer then moved to the corn pit with this friend. They were two small-time traders learning to trade one-lots and scratch trade.
Singer traded on the floor for five years before moving off the floor and opening his own brokerage firm with his brother-in-law. The firmer, Singer-Wenger, would train new traders on how to trade. The firm bought 10 permits because they could not convince old grain traders to move to new trading pits. Singer said they brought friends and relatives down to the trading floor and taught them how to scalp and spread the markets.
Singer did not enjoy all the things you had to do sometimes to get trades done, so FCM business model was more to his liking. At one time, the firm had 100 traders at the Chicago Board of Trade and another 100 at the Chicago Mercantile Exchange. At the time, Chicago had about 80 percent of the futures business, Singer said.
New York was way behind, Singer said, so he hired some traders in New York, including a former quarterback for the Yale football team. Singer told the new trader to recruit some other traders, so he recruited the whole backfield of the Yale football team, Singer said.
During the silver market of the late 1970s when Nelson Bunker Hunt was manipulating the markets, Hunt sold 50 big contracts in Chicago at a discount to New York’s Comex silver prices. Singer was able to get in on the trade for a five lot, make the opposite trade in New York, do the conversion, and walk away with a $60,000 profit for the year in early January.
Singer did not have a worst memory from the trading floor, though his first out-trade was with Lee B. Stern, who he learned was a prominent CBOT member.
Singer said trading on the floor was the greatest thing he ever did. He loved the life and the hours, and getting done at 1:15 p.m. gave him lots of time to do other things.
He spoke about getting the edge on trade as being the economic opportunity of the day. He spoke about how after he took a position, he would lean against the paper, or customer or commercial orders, and then scratch a trade when the orders started to disappear.
Muhammed Ali came to the CBOT trading floor one day for a charitable event, Singer said. Ali walked into the soybean pit.
Singer said he never had a bad error. He checked all his errors. Singer said people would get suspicious if someone had a lot of errors on the trade. He told the story of one trader who was saying he traded with other traders in the hopes of getting a check for an error. When Singer reported him to the trader’s clearing firm, the trader was asked to leave the firm.
Singer said he would not participate in the hectic openings of the markets as there was too much pushing and shoving, so he would back off and wait for the activity to become more orderly.
The markets did not affect his health, Singer said, but he told the story of getting into conflict with a trader in the silver pit who was not responding to his bids. After the fourth time not being heard, Singer shoved the trader and got in his face, and the trader took a swing at him. However, Singer’s brother-in-law stepped in front of the punch and ended up with a black eye. Singer ended up getting suspended for one day for participating in disorderly conduct.The other trader was suspended for much longer, Singer said.
When the markets were slow, Singer said he would go play racquetball or hang out in the members’ lounge and wait for some noise to happen. Singer said, “You follow the noise.”
Singer was normally a 10 lot trader, but once during a quiet time of the day someone hit him with a 50 lot trade. Singer took the trade and worked for the next 30 minutes to offer 1 and 2 lots to get out of the trade, finally scratching it. He described the 30 minutes as a long time for a scalper to be in a trade.
Singer was on the new products committee and the margins committee, which he described as an important committee. He said it was crucial to make sure no one on the margins committee was in the market at the time the margins were being changed so they could not be accused of favoring someone.