Customer Reviews

Out of the Pits: Traders and Technology from Chicago to London

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The pit trader postures and screams to establish dominance. He uses physical and psychological intimidation to scare off potential competitors. A certain amount of cooperation and even trust is necessary for him to be successful. It's surprising that Jane Goodall hasn't seen fit to study these young primates.

Caitlin Zaloom, a cultural anthropologist, lived among the savages at the Chicago Board of Trade (CBOT) and the London International Financial Futures Exchange (LIFFE) for several years, long enough for them to become accustomed to her presence and even, to a point, trust her or at least ignore her. A woman in the trading pit is about as rare as a human living among the gorillas.

There are some pretty compelling reasons to study the trading pits. They are disappearing and soon most trading will be done electronically from all over the world. Traders won't be in the same room with each other and shouting will get you nowhere. How will this change trading? Obviously a loud voice will no longer give a trader an advantage, but will being an alpha male still be a plus?

Zaloom looks at the traditions of traders, the architecture of the trading space, the traders' clothing and habits, how traders get their jobs and how they're trained. She learned the techniques of traders and she became a trader. It's a short book (177 pages of text plus excellent and detailed notes, bibliography, index, and photos), but it covers a lot of territory. The style is often academic, with references to Michel Foucault, for instance, but on the other hand, these are pit traders we're talking about, so you'll have to pardon their French. Zaloom describes an especially colorful London trader, Freddy, who wears khakis with holes in them that show his underwear. He picks his nose, flashes the pit, and sings and barks loudly. It's hard to imagine how the markets will survive without him.

Interesting book, well written. Covers trading from an integrated point of view about how technology, money and other events interconnect. Gives trading a human touch. Glad I have the book.

There are books that you read in 5 hours. This is not this kind of book.
If you know nothing about trading floors and you want to learn about them, this is not your book.

I'm an economist but studying an anthopology degree so I was really eager to read this book coming from a well known anthropologist talking about finance.

First, it describes the history of the 1930 CBOT building (built to foster the trader's spirit and to improve competitivity and achieve a perfect market). Then Zaloom explains the difference between an open-outcry trading (Chicago) and the online trading (being launched in London at the time) and all the related problems that this "fight" originated mainly in the "being" and how the market was being reshaped.

Her description of the American Man is extremely technical (I mean, she uses too much "philosophical" concepts-if you are not an expert you will have problems). The rest of the book revolves around the fight between the old trading method (still working in Chicago) and the new one, the electronic trading platform in London.

Finally, the book has too many footnotes (take into account that the book has 177 pages and 30 pages of notes); sometimes is difficult to follow because in the same page, for example page number 113, you find 7 footnotes!.

Maybe it's because I have never read a book like this before, but I will need time to process and likely, to re-read the book to fully absorb it true spirit and new vocabulary (rationality, being,barrow boys,...)