After watching Floored, a documentary about old-school traders on Chicago’s exchange floors, I wonder (once again) if there is much difference between gambling and trading commodities.
One can’t help but notice the subjects of the film, struggling to adapt to the new ways of doing business (computer vs. in-person trades), resemble professional poker players. They wear odd clothes to distinguish themselves on the floor. They are driven by the thrill of making major money in a split second. They thrive in a high stress environment where reading faces and feeling the vibe of the room can be just as important as the math behind it all. Telling these men that their livelihoods is now going to a world dominated by computers is like telling a pro poker player all the money is in online poker. With that one revelation their worlds get flipped upside down. And that reality is the one that Floored examines in its last act. Along the way are fascinating characters, stories, and insights into a world that most of us never get to see, nor will we in the case of the manic days of trading on the floor.
Being a fan of Michael Lewis’ Liar’s Poker, where he tells his story of working at Salomon Brothers in the ’80s, made me particularly interested in watching Floored once I discovered it thanks to Netflix’s recommendation. I was not disappointed. A relatively short film (77 minutes), it wastes no time getting into the insanity of trading floors, including a brief but helpful explanation of what all those crazies yelling at each other in the middle of a pit do. Unbeknown to me, many of those in the pit put up their own money in the trades. That fact alone leads to some intense pressure.
Let there be no doubt, the love of money drives these guys. They are every bit materialistic as they are thrill seekers. Regrets are not expressed by the sadness of losing oneself in insatiable greed or the loss of fellow traders to suicide. No, regrets from these men are often about not staying ahead of the game, either by adapting to the change to computer trading or missing out on some great trades.
Stories of fights after trading hours breaking out include one where two traders take it out to the parking lot. After trading a few blows, one of the traders swings while the other ducks and the punch lands through the window of a car. The trader with a bloody, glass filled hand asks the other for a ride to the hospital. The request for a ride is refused. Mind you, the trader telling this story (the one who refused to give a ride) is eccentric to say the least. We meet him at his house where he shows off an endless display of taxidermy animals he’s killed over the years. Bonus points for putting some of them on wheels, including a giraffe. While giving a tour of the place, this former floor trader states that it’s not any fun if you can’t get killed. I think he was referring to hunting wild animals, but I think his motto applied to his approach to trading.
There is little sympathy in the end for those who find themselves on the way out as a new crew takes their place in the form of analysts, computer scientists, and mathematicians. The game is being played by better players. Too bad that same game is one where most of us are blindly invested.