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My Book Reviews

Category: Commodities trading, commodities exchanges, market history
Published: 1985
Read: 1993
Reviewed: Jun 2010

This book is a profile of the commodity traders (mostly floor traders) from the 1970s and 1980s who got very rich very fast. It starts with the author telling the story of his first commodity trade - a common story that all fellow traders can relate to. There are profiles of different floor traders, including Paul Rosen, a floor trader who develops serious problems in his personal life after having trouble in his trading life.

There are many interesting trading stories (a trader who took physical delivery of 30 train cars of onions, Leo Melamed's trade where he almost lost over a million dollars, the frozen orange juice rumor that sent the market limit up). Additionally, the book talks about the history of the exchanges, some of the older contracts (agricultural), the newer contracts (stock index and currency futures), and the wild markets of the 1970s.

The book mixes historical information with stories that were current at the time. Now that the book is 25 years old, all of the information has become historical. Since open outcry trading will probably be completely extinct someday, this book will retain its value as a well-written, interesting, and valuable historical account of the unique culture of the trading pits of the 1970s. Here are a few interesting quotes:

  • "As far as I was concerned, there were only two types of commodity speculator: the risk takers and the big risk takers."
  • "The market, as all the purists will tell you, tends to conspire against the single biggest interest."
  • "Starting the day with an outtrade is like going to a wine-tasting party with a hangover."
  • "If I were trading without a position, I'd be buying the market right now", Jack Sandner when deciding to hold onto a large losing short position.
  • "In groups people tend to take more risks than they do individually."
  • "No capitalist has the relationship with time that commodity traders do. The inexorable passage of one second to the next, from one tick to the next, works magic on traders."
  • "There is no place on earth where a person can ascend and descend the socioeconomic scale as quickly as on the floor of a commodities exchange."
  • "Lose your opinion, not your money."

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