BEg2 ch27 trading again

[Michael Bailey]

When the CME decided to ban double trading, Horst joined a good-size
migration over to the CBOT, where no such qualms existed, though Eurodollar
activity was noticeably less intense. For a while he shifted to Treasuries,
but soon, as if answering some call from deep in the tidy iterations of
Midwest DNA, he had found his way into the agricultural pits, and next
thing he knew, he was out in deep American countryside, inhaling the aroma
from handfuls of wheat, scrutinizing soybeans for purple seed stain, walking
through fields of spring barley squeezing kernels and inspecting
glumes and peduncles,
talking to farmers and weather oracles and insurance adjusters—or, as he put
it to himself, rediscovering his roots.


CME - Chicago Mercantile Exchange
CBOT - Chicago Board of Trade

Double trading:
https://www.sciencedirect.com/science/article/abs/pii/S1042957396900030
Abstract

This paper analyzes dual trading on futures contracts restricted by Chicago
Mercantile Exchange Rule 552. Using floor trader data, several categories
of traders are identified, and differences in strategies and profitability
are examined. When unrestricted, dual traders execute most customer orders
and few personal trades. The evidence supports the hypothesis that dual
traders are superior brokers. However, there is no evidence of
informational advantages in dual traders' personal trading. Dual traders
are shown to provide liquidity with their personal trades. Finally, Rule
552 does not appear to have increased trading costs.*Journal of Economic
Literature*Classification Numbers: G12, G13, D82.

Eurodollars -
https://www.cmegroup.com/trading/interest-rates/introduction-to-eurodollar-futures-and-options.html

Snoozefest - but Horst smelled money there.

Probably being part of a loud cohort of physically present traders also
helped him in keeping awake.


Purple seed stain
https://cropprotectionnetwork.org/encyclopedia/purple-seed-stain-of-soybean


Purple seed stain is caused by the fungus *Cercospora kikuchii*. Seeds
infected with this pathogen can be symptomless or have pink to purple spots
extending from the hilum. Discoloration can cover the entire seed or appear
as small spots.

Crop value may be lowered by dockage or seed certification denial, but
yield is not reduced.


(Would probably affect costs & prices)



Glumes - sample sentence here seems relevant:

https://dictionary.cambridge.org/us/dictionary/english/glumes

Hulled wheats need substantial extra pounding or milling to remove the
tough *glumes*.


(Again price-affecting)


Peduncles -
https://amp.realagriculture.com/2019/08/wheat-school-checking-the-peduncle-and-kernel-ahead-of-a-pre-harvest-glyphosate-pass/

“You’re going to go to the least advanced part of your field, and the first
thing you’re going to do is look at the peduncle — which is the area of the
stem below the head, at the top of the stem. If that stem has turned from
green to yellow, it’s no longer translocating energy from the bottom of the
plant up into the head. So what this means is if you apply glyphosate onto
that plant, it’s not going to be moving it up as quickly,” he explains.”



Gratuitous pontification (-; ——-

Getting back to his roots - if he went to college, maybe the first in his
family of farmers - or maybe the first to get excited about an economics or
finance major - maybe some professor saw a glint of keenness and put him
onto a track leading to trading.

Dealing in the actual “fields” with the physical realities behind the
abstractions in his chosen “field” was nostalgic & also useful to keep a
hand in.

But Chicago’s physical realities compete strongly for his attentions:

Still, farm fields Kum & farm fields Go, but it’s Chicago that really pulls
you back. Horst took his sons to the traders’ cafeteria at the CBOT, and to
the Brokers Inn, where they ate the legendary giant fish sandwich, and to
old-school steak houses in the Loop where the beef is hung aging in the
front window and the staff address the boys as “Gentlemen.” Where the steak
knife next to your plate is not some flimsy little serrated blade with a
plastic handle but whetstoned steel riveted into custom-hewn oak. Solid.”

How do you keep them down on the farm?

New set of roots in town? Pied-a-terroir?

Hmm, just like aspiring artists make the big leap from the Second City to
the Big Apple, maybe Maxine kind of recruited him for NYC in addition to
for herself - while he was recruiting her for his network of folks in need
of fraud counseling.

Double trading! Well, sort of?

So maybe the whole “leaving her” escapade allowed him to work out his roots
nostalgia for closer-to-the-source legwork - not just in the Midwest but
all over the place: in Chapter 29 he refers to a stay in Ürümqui which is a
big city in (troubled) Uyghur territory, similar to his beloved American
Midwest in being far from any ocean.

And coming back to the non-agricultural but at least equally physical
realities of Maxine and his sons and trading in New York with a
(temporarily) WTC office is a recapitulation of how he gravitated back to
Chicago from those pesky peduncles.

Still getting used to online trading, but the momentum he gained in
youthfully “crying all those lots” (couldn’t resist) and lots of crops and
money in the CME and CBOT isn’t spent as he embraces the higher-order
abstraction required for quietly, but no less excitedly, being part of an
online cohort.