Quantitative Brokers’ Executive Chairman Tom Ascher Recalls His Days Trading on Floor
Tom Ascher was interviewed by John Lothian News over Zoom for the Open Outcry Traders History Project. Ascher traded at the Chicago Board Options Exchange, and after getting into exchange politics he rose to vice chairman of the CBOE board. He later served as the CEO of Nasdaq-Liffe and had a long run as the chief strategy officer of the International Securities Exchange. Today, he is the executive chairman of Quantitative Brokers, which is majority owned by Deutsche Boerse.
Ascher was a cash grain merchandiser right out of Carleton College, in Buffalo, New York, trading feed ingredients for the Pillsbury Company when he wanted to trade in a bigger market.
He was introduced to the legendary futures and options trader Steve Fossett and moved to Chicago to work for him. Ascher said he believes Fossett hired him because of something completely separate from trading; Ascher had done some bicycle racing while in France on a student-abroad program and was known for his racing and extreme sports activities.
Ascher was a contemporary of Cboe Executive Chairman and CEO Ed Tilly, who was an exchange nominee for Fossett, meaning he was trading on an exchange membership that was leased or owned by Fossett’s company.
Ascher talks about his days on the trading floor, his trading style, and what it was like to work on the floor, including during the 1987 stock market crash. He was just 18 months into his floor trading career when the crash came and he said there was no guidebook for such market action.
He was slightly short volatility going into the crash and long Merck stock, which was the pit in which he traded. He sold the Merck shares and then just made markets in options.
Going into Tuesday, October 20, 1987, his position was shorter than he was comfortable with, but after the long opening process, he covered his short position. He called it “good old-fashioned dumb luck.”
He spent most of his floor trading career in the same pit. Mark Esposito was a big force in that pit.
Ascher talks about the early days of auto-quoting and how that helped make the market openings more efficient.
He talks about RAES – retail automated execution systems – and how those systems look like the Jurassic Park of electronic trading today.
He talks about the closing procedures and getting hit on the close with trades he could not offset.