Joe Corona’s Open Outcry Traders History Project story is a frank discussion of someone who stumbled into the markets as a temporary gig on his way to another career that never happened. Joe started a career in the markets after a friend of a friend helped him get a job as a runner at the Cboe in 1980 after he graduated from Northwestern University, and he never looked back.
By 1982, Corona was trading on a house badge at the Cboe, using an arbitrage strategy of conversions and reversals. He would later buy a Commodity Options Membership, or COM, at the CBOT and then a CBOT Associate Membership. Otherwise, he said, all his exchange memberships were leased.
Corona found his way to the CBOT when he was hired by Charlie Cottle to trade bond options and to help grow an options trading group. It was at this group that Corona started to look for the street smart, sharp type of people who would make good traders, whether they were PhDs or high school dropouts.
What Cottle and Corona were looking for was a certain personality type: type A, aggressive, quick on the feet, disciplined and numerate.
“You were just looking for sharp, street smart, savvy people,” Corona said.
Corona said he was perpetually sick during his years on the trading floor with “pit crud.” He said he was “sick every day of the year.”
His parents had no idea what he did, but were happy as long as he was happy. However, his trading career was hard on his immediate family with the time-consuming long hours necessary to manage his trading positions and the people under him, and their trading positions.
At one point, Corona and some partners set up a trading operation in India that required him to travel there and spend weeks at a time away from his family. He said this was not something he would do again if he had a chance to do it over.
What he really would change, he said, is that he would have been more ruthless in managing himself and managing other people, knowing that the days of open outcry trading were limited.
He left the trading pits of Chicago when he was offered an opportunity to go to London and trade the OTC market as the Euro was coming into being and European countries had to get their balance sheets in order to make it happen.
Near the end of that experience, the first inkling of electronic trading’s impact occurred as the bunds moved from LIFFE to Eurex, Corona said.
Corona’s favorite memory of the trading floor was the camaraderie. He said there was an honor system in the trading pit and that even if you hated someone, you would not let them harm themselves. If they had bad inputs in their sheets or were doing something else that was just wrong, someone would grab them and stop them.
If a trader blew out, fellow pit traders would pass the hat to raise the money necessary to get them back in the trading pit, even if that meant they were back standing next to you competing against you the next day, Corona said.
Corona said the biggest differences between the CBOT and CME were the fights. At the CBOT, the fights were like gladiator matches that would go on for 10 minutes or more, Corona said. At the CME, it was more genteel and you would get fined for pushing someone a little too much while leaving the trading pit.
There were also differences in hand signals that could get you in trouble if you forgot which exchange you were trading on, he said.
The economic opportunities in the 1980s were tremendous, Corona said, but there was also lots of risk.