Currency Trader Yra Harris Says Early Days of the CME Offered Near-Boundless Opportunity, Taught Him Market is Always Right
In the early days of the Chicago Mercantile Exchange, economic opportunity was phenomenal, said CME currency trader Yra Harris. ”I used to say it was like Jed Clampett [the character in the old TV series “The Beverly Hillbillies” who struck it rich] shooting at the ground and hitting oil.” It was a booming business.
Harris said he recently read CME Chairman Emeritus Leo Melamed’s latest book, “The Man of the Futures,” and was glad Melamed took the high road in the book. “It really rises above whatever animosities you might have,” Harris said. “Even back in the ’70s, I would say to him, you are making more millionaires than Steinbrenner [the principal owner of the New York Yankees from 1973 through 2010]. The exchange was growing by leaps and bounds.”
“I come from a very middle-class background,” Harris said, “where you work hard.” If you were willing to avail yourself at the CME, there was nothing but opportunity, he added.
“My worst day was in 1982,” Harris recalled. “I thought the dollar was going to go lower. I learned that lesson — the markets are always right. … As an investor, you may sit through it, but not as a trader, because your losses will pile up so dramatically that you will get crushed.”
For a trader, “capital is your inventory,” Harris said. “If you’re Macy’s and you don’t have inventory, you can’t open the door tomorrow,,” Harris said. “So preserve your capital and pay attention.”
The greatest teacher is loss-taking, Harris said. “I learned to be patient.” He said his worst error ws in 1971 — a $10,000 outtrade that he had to split.
Market openings were critical, Harris said. They would set the tone, although in the currency markets, the openings were not as significant because the trading was 24 hours a day, he said. “I was much more interested in grain openings, especially when there was news. They would say, ‘buy the rumor and sell the news.’”
On a slow day, Harris said he would work out. When the weather was nice he would run along the lake. “The lakefront was great because I would stop at the [pay] phones … I’d take a break and I would call in to see what was going on,” he said.
As for day-to-day trading, “you needed the locals,“ Harris said. “There were those, especially in the currency markets, that only hit the dealers,“ but If you lost the locals, you were killing yourself. “I would try the locals who I thought were really good market makers, always hitting them. That didn’t mean you didn’t hit the dealers, too,” he added.
Harris recalled going to a CME FX committee meeting after the FBI investigation of the Chicago exchanges in the 1980s. They asked the question, he said, “If you are standing on the top step, or the second step, and you see the order hand-signaled in, can you trade off of it?”
“My answer was yes,” Harris said. “By signaling it [the order] in, does that become public information? That was a serious issue. I can argue it ethically, but where is a hand signal into the pit not public information?” When there is pandemonium, you are trying to protect yourself while giving the best order to the customer, he said.
But while there was intense competition on the trading floor, there also was generosity. There was a trader who came down with brain cancer, Harris said. In response, “I saw guys pass the hat one day. And they probably collected $20,000 to $30,000 in a hat — in cash — that he could take home.”
Harris pointed to his friend, retired trader Michael Sturch, known locally as “Santa Mike,” as another example of traders who shared their largess. Sturch has been raising money for seniors and children at Marillac St. Vincent Family Services in Chicago for more than 50 years.
Looking back on his career, Harris also said he is proud of the fact that he was one of the only floor traders who ever sat on a CFTC oversight committee — the financial products advisory committee. In the process, he became friends with Wendy Gramm, a former CFTC chair and Chicago Mercantile Exchange board member.
“My mother said don’t be fooled by wealth — all you take to the grave is a good name,” Harris said. ”That has served me well. …. That is a life lesson I try to teach my kids. Reputation is everything.”