I started this on this thread if you want to read the my early history.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=48751&perpage=6&pagenumber=2
So I was hired by Goldenberg, Hehmeyer to run their overnight desk and to trade CBOT treasuries on Globex. I was going to school at the Illinois Institute of Technology in their Financial Markets and Trading program and I thought I would get a chance to study while working the overnight shift which I figured to be pretty slow. The guy who I was replacing, Tony Abatangello (Sorry about the spelling Tony), had been doing the job since Globex had opened in 2002 and decided he had had enough of working nights. In that time he had built up a nice sized trading account for G&H and he wanted to head down to the 5 year pit.
I did not think much of Globex or electronic trading so the first night I watched Tony working I was in for a shock. It was rollover and he legged a couple hundred bond spreads at great levels. I was shocked at how easy it was and I could not believe he would want to leave this. (Turns out I was right, electronic skills and pit skills do not translate and I paid a lot of money to learn that) I started at night in December of 2003 and I barely touched a book for the next 6 months. This is my favorite story and gives you a great idea of how easy the edges were. One night someone sent an RFQ for the front and back month 5 years. G&H hade a telerate screen in the lounge where the overnight desk was. I would make fairly wide markets in the bonds and sometimes the 10 years based on what I could lean against and what the cash market said. I put up three tick wide markets in both front and back 5 years and then some idiot legged into the spread. I could not believe it. I would have happily given him a much better market in the calender spread if they had asked. Just goes to show you that the best people were not working overnight.
One of the greatest disappointments in my life is when I heard that the CBOT was removed/kicked off of Globex. I was beside myself and it was a long 6+ months waiting for Project A (PJA) to open up. Project A opened in the fall of '94 but only in the afternoons. Forgive me but I am forgetting some details but i think the opening was 2.30 in the afternoon and the close was 4.30. Eventually, PJA opened up at 2.15. PJA was far ahead of Globex. It was client/server vs. mainframe and the GUI was much easier to use than the clumsy keyboard entry system of Globex. The biggest problem I had with PJA was the fact that there was no way to save the desktop so you had to set it up each day. Besides that I was very happy. At this point, Tony had given up trading in the pit and came upstairs to trade PJA. I did not trade immediately when it opened because Chris Hehmeyer wanted me to do brokerage for the firm and until a replacement was trained. I was happy to help. I did ok but I do not have the temperment to deal with traders. We are a**holes. I had never done brokerage before. Also, I missed a trade for a trader for a SB and the trader was just an absolute a** about it. I tried to explain the market was moving very fast and by the time I quoted something and he made a decision the order was gone. in retrospect i should not have been giving him every signal market change. Anyway, his boss called back and asked what happened and I tried to explain that I could not react fast enough and that I would do better when the trader who had been listening in cut in and called me a liar. I slammed the phone down and the guy who was working with me just stared at me and said he hoped that wasn't who he thought it was. Chris came back and asked me what happened and the only thing that saved my job was that no one could do what I could.
I was moved out of that role into trading next to Tony. I did that in the afternoon and worked the night shift. In their infinite brilliance the CBOT did not open PJA overnight until December 1995, a year after the afternoon. I was G&H's liaison with the Tech people at the CBOT. I got along with the tech guys but the bureaucrats were another story. I believe the CBOT had a great thing in PJA but incompetence and the fear of the stupid, old men who controlled the exchange kept them from capitalizing on their advantage. One person deserves a lot of credit for creating PJA and that is Burt Gutterman (SP?, again sorry) He helped the Board create it with great suggestions. PJA was years ahead of its time.
I thirved on PJA. I went from trading 10 lots to 100 in 94. The trade was very different from Globex in that you did not sit for hours waiting to pick off some idiot. You actually had to trade in a market that was moving and I started getting into spreading which was a natural segue. During this time Chris Hehmeyer gave me a Prop trading contract to sign. I showed it to my lawyer and he said to sign it because it was useless but if I could get away without signing, do it. So the contract went into my desk and I held Chris at bay for most of the year saying my lawyer was really slow. Finally I said I did not like the terms and that we should just keep the percentages we had agreed upon without the non-compete and other BS. Towards the end of 95 I started to train someone to takeover the nightshift because I wanted to trade at night when it opened. At about the same time I mentioned to Chris that I was close to reaching the goal which would allow me to keep 70% of what i made. That is when he informed me that the agreement reset at the beginning of the new year. B***s*** was what I thought and I decided to inform them that my employement was nearing an end and I would go out on my own. I had enough to trade so I thought why not keep the money. I had made them a couple of hundred grand and, although Chris was not happy, Ralph wished me luck.
This is when I had one of the most difficult experiences in my life. I am proud to say I came through it with my pride and mostly unscathed but I learned a great deal about how far loyalty goes for some people. My replacement decided to quit about three weeks after PJA opened at night. I was supposed to leave but I felt loyalty to G&H and I really wanted to stay on and clear there so I agree to train someone else but I said that they should pay up and get one of the day PJA clerks to take the nighshift. I did not want to stay for 3 months training someone while there were perfectly capable people available. The mistake I made was continuing to trade during this time. PJA at night was fairly busy and we were getting calls all of the time. We had one particularly active trader who did a lot of size and he was always my responsibility. You can probably guess what happened. I was watching the markets and I could see what was a good trade. I would take part of something and this guy would call and take out the rest. This happened more than a few times and I had learned in an ethics class that there was no way to avoid a conflict of interest when you are dual trading. I knew this but I did not stop. I just pressed Chris to hire a replacement. All this time he kept offering more money and a piece of the brokerage to stay. I kept saying no. I am really glad I did. It all feel apart when a small trader called one night to put in an order at a level in which I had an order. Long story short was I got the trade and he found out about it and complained. I am immensely proud that I came clean and told G&H ever time I thought that I had a conflict of interest and even had gone through weeks of files to show them. So, 5 or so weeks after PJA opened at night G&H suspended me and called the Office of Investigations and Audits (OIA) to report the incidents. I don't blame them one bit, they had to protect the firm and it would have gotten them in trouble if they did not report this. But what really hit me is the way Chris Hehmeyer turned on me. He went from trying his best to entice me to stay to my continued refusal to saying that I should not be allowed to trade at the CBOT. I asked him if he would back me up and say that I was trying to leave, that I had no plan to steal from the customers and that I would have been stopped doing brokerage if not for their need for me. I had talked to Chris every morning for 2 and a half years and that did not mean SH** to him. Unbelievably, Ralph told me he thought I was innocent of malicious intent but they firm had to hire a lawyer and he suggested I do the same.
I gave a deposition, I spoke to OIA and I told the truth even if it made me look bad. I think that is what saved me. Like I said, loyalty is not worth taking the chance of doing anything unethical and I should have not traded and set a date that I was leaving. They could deal with it. In the end it was dropped and I did stay at G&H. The fact that they would agree to clear me made me feel that they did not consider me guilty. Of course, Chris took about a week to make that decision. Excuse me, M***********! Leaving me twisting in the wind. I was buried in a bottle that entire time. But in the end I came out ok and I started trading nights and afternoons fulltime in the spring of '95.
More later...
http://www.elitetrader.com/vb/showthread.php?s=&threadid=48751&perpage=6&pagenumber=2
So I was hired by Goldenberg, Hehmeyer to run their overnight desk and to trade CBOT treasuries on Globex. I was going to school at the Illinois Institute of Technology in their Financial Markets and Trading program and I thought I would get a chance to study while working the overnight shift which I figured to be pretty slow. The guy who I was replacing, Tony Abatangello (Sorry about the spelling Tony), had been doing the job since Globex had opened in 2002 and decided he had had enough of working nights. In that time he had built up a nice sized trading account for G&H and he wanted to head down to the 5 year pit.
I did not think much of Globex or electronic trading so the first night I watched Tony working I was in for a shock. It was rollover and he legged a couple hundred bond spreads at great levels. I was shocked at how easy it was and I could not believe he would want to leave this. (Turns out I was right, electronic skills and pit skills do not translate and I paid a lot of money to learn that) I started at night in December of 2003 and I barely touched a book for the next 6 months. This is my favorite story and gives you a great idea of how easy the edges were. One night someone sent an RFQ for the front and back month 5 years. G&H hade a telerate screen in the lounge where the overnight desk was. I would make fairly wide markets in the bonds and sometimes the 10 years based on what I could lean against and what the cash market said. I put up three tick wide markets in both front and back 5 years and then some idiot legged into the spread. I could not believe it. I would have happily given him a much better market in the calender spread if they had asked. Just goes to show you that the best people were not working overnight.
One of the greatest disappointments in my life is when I heard that the CBOT was removed/kicked off of Globex. I was beside myself and it was a long 6+ months waiting for Project A (PJA) to open up. Project A opened in the fall of '94 but only in the afternoons. Forgive me but I am forgetting some details but i think the opening was 2.30 in the afternoon and the close was 4.30. Eventually, PJA opened up at 2.15. PJA was far ahead of Globex. It was client/server vs. mainframe and the GUI was much easier to use than the clumsy keyboard entry system of Globex. The biggest problem I had with PJA was the fact that there was no way to save the desktop so you had to set it up each day. Besides that I was very happy. At this point, Tony had given up trading in the pit and came upstairs to trade PJA. I did not trade immediately when it opened because Chris Hehmeyer wanted me to do brokerage for the firm and until a replacement was trained. I was happy to help. I did ok but I do not have the temperment to deal with traders. We are a**holes. I had never done brokerage before. Also, I missed a trade for a trader for a SB and the trader was just an absolute a** about it. I tried to explain the market was moving very fast and by the time I quoted something and he made a decision the order was gone. in retrospect i should not have been giving him every signal market change. Anyway, his boss called back and asked what happened and I tried to explain that I could not react fast enough and that I would do better when the trader who had been listening in cut in and called me a liar. I slammed the phone down and the guy who was working with me just stared at me and said he hoped that wasn't who he thought it was. Chris came back and asked me what happened and the only thing that saved my job was that no one could do what I could.
I was moved out of that role into trading next to Tony. I did that in the afternoon and worked the night shift. In their infinite brilliance the CBOT did not open PJA overnight until December 1995, a year after the afternoon. I was G&H's liaison with the Tech people at the CBOT. I got along with the tech guys but the bureaucrats were another story. I believe the CBOT had a great thing in PJA but incompetence and the fear of the stupid, old men who controlled the exchange kept them from capitalizing on their advantage. One person deserves a lot of credit for creating PJA and that is Burt Gutterman (SP?, again sorry) He helped the Board create it with great suggestions. PJA was years ahead of its time.
I thirved on PJA. I went from trading 10 lots to 100 in 94. The trade was very different from Globex in that you did not sit for hours waiting to pick off some idiot. You actually had to trade in a market that was moving and I started getting into spreading which was a natural segue. During this time Chris Hehmeyer gave me a Prop trading contract to sign. I showed it to my lawyer and he said to sign it because it was useless but if I could get away without signing, do it. So the contract went into my desk and I held Chris at bay for most of the year saying my lawyer was really slow. Finally I said I did not like the terms and that we should just keep the percentages we had agreed upon without the non-compete and other BS. Towards the end of 95 I started to train someone to takeover the nightshift because I wanted to trade at night when it opened. At about the same time I mentioned to Chris that I was close to reaching the goal which would allow me to keep 70% of what i made. That is when he informed me that the agreement reset at the beginning of the new year. B***s*** was what I thought and I decided to inform them that my employement was nearing an end and I would go out on my own. I had enough to trade so I thought why not keep the money. I had made them a couple of hundred grand and, although Chris was not happy, Ralph wished me luck.
This is when I had one of the most difficult experiences in my life. I am proud to say I came through it with my pride and mostly unscathed but I learned a great deal about how far loyalty goes for some people. My replacement decided to quit about three weeks after PJA opened at night. I was supposed to leave but I felt loyalty to G&H and I really wanted to stay on and clear there so I agree to train someone else but I said that they should pay up and get one of the day PJA clerks to take the nighshift. I did not want to stay for 3 months training someone while there were perfectly capable people available. The mistake I made was continuing to trade during this time. PJA at night was fairly busy and we were getting calls all of the time. We had one particularly active trader who did a lot of size and he was always my responsibility. You can probably guess what happened. I was watching the markets and I could see what was a good trade. I would take part of something and this guy would call and take out the rest. This happened more than a few times and I had learned in an ethics class that there was no way to avoid a conflict of interest when you are dual trading. I knew this but I did not stop. I just pressed Chris to hire a replacement. All this time he kept offering more money and a piece of the brokerage to stay. I kept saying no. I am really glad I did. It all feel apart when a small trader called one night to put in an order at a level in which I had an order. Long story short was I got the trade and he found out about it and complained. I am immensely proud that I came clean and told G&H ever time I thought that I had a conflict of interest and even had gone through weeks of files to show them. So, 5 or so weeks after PJA opened at night G&H suspended me and called the Office of Investigations and Audits (OIA) to report the incidents. I don't blame them one bit, they had to protect the firm and it would have gotten them in trouble if they did not report this. But what really hit me is the way Chris Hehmeyer turned on me. He went from trying his best to entice me to stay to my continued refusal to saying that I should not be allowed to trade at the CBOT. I asked him if he would back me up and say that I was trying to leave, that I had no plan to steal from the customers and that I would have been stopped doing brokerage if not for their need for me. I had talked to Chris every morning for 2 and a half years and that did not mean SH** to him. Unbelievably, Ralph told me he thought I was innocent of malicious intent but they firm had to hire a lawyer and he suggested I do the same.
I gave a deposition, I spoke to OIA and I told the truth even if it made me look bad. I think that is what saved me. Like I said, loyalty is not worth taking the chance of doing anything unethical and I should have not traded and set a date that I was leaving. They could deal with it. In the end it was dropped and I did stay at G&H. The fact that they would agree to clear me made me feel that they did not consider me guilty. Of course, Chris took about a week to make that decision. Excuse me, M***********! Leaving me twisting in the wind. I was buried in a bottle that entire time. But in the end I came out ok and I started trading nights and afternoons fulltime in the spring of '95.
More later...