On Tuesday, Chicago trader Martin Rogers watched a customer lose $17,000 trading Dow futures. But the downward spiral was short-lived. On Wednesday, he made back almost all of it, $16,000 worth, in one day.
Extreme wins and losses are part of the trading mentality, Rogers, 30, said. In his first year of trading, he ran through $60,000, his life savings hoarded from odd jobs and living with his parents while in college. He turned his fortunes around a year later after borrowing $20,000 from his girlfriend and deciding he’d rather stay in the game than quit while behind.
“One day you’re king of the hill, one day you’re eating ramen noodles at 10 cents a package,” Rogers said. Since then, he’s paid back the girlfriend (now fiance), practically paid off his Gold Coast condo and netted a comfortable six-figure income each year.
For most of us, it’s hard to comprehend such a fluid relationship with money, an easy-come-easy-go attitude that encourages big spending because one never knows what–or more importantly, how much–tomorrow might bring.
It’s a chance to live like a gambler or a rock star, an attitude and a lifestyle that a brand-new magazine called Trader Monthly is seeking to capture.
The magazine’s motto is “See it, make it, spend it,” and it’s full of suggestions to help traders do just that. The pages brim with advice from successful moneymakers, lists of top moneymakers and bonus earners in the business–plus pages of luxury trips, fancy cars, expensive watches, high-end liquors and fine clothes.
Oh, and lots of hot women.
Fantasy or reality? Or a bit of both?
“I wish it were that glamorous,” says Dustin Schneider, a 24-year-old cattle trader. “It’s a good life, but I’m not surrounded by exotic, beautiful women at all times.”
Aside from the swooning, rail-thin models, the mag isn’t far off. Traders make enough to afford the better things in life, and they spend it on stuff like cars and travel.
“For a lot of guys, this is real and attainable,” editor Randall Lane said. And for those who haven’t made the trades to afford a $15,000 watch or $80,000 British sports car, there’s always next year.
“It’s stunning how many millionaires are minted each year on the trading floor,” Lane said. “It’s literally tens of thousands nationwide.”
While traders tend to be cagey about exactly how much they make–it’s a hyper-competitive business and no one wants to tip their financial hand to the guy standing next to them in the trading pit–signs of living big are easy to spot. There are BMWs, Mercedes and Jaguars in the parking lots surrounding the Board of Trade downtown, penthouse apartments with killer views, boats, plasma TVs and wine cellars and guys willing to blow a healthy chunk of money entertaining friends at one of the upscale restaurants or clubs downtown.
For Schneider, the young cattle trader, his show-off purchase is a silver Porsche Boxster S convertible, a car listed for more than $50,000 that he paid for last summer in cash. Schneider describes it as beautiful.
The car now sits in an underground garage at his Lincoln Park condo building, stuck in place until the end of the Chicago winter because it turns out the car is miserable in the snow. But Schneider doesn’t mind–he can take cabs in bad weather, and he didn’t buy the car based on its practicality.
“It holds my golf clubs, it’s fast, it’s fun. Those were kind of my requirements,” Schneider said.
Being a trader has other perks too.
The cattle market is only open from 9 a.m. to 1 p.m., so Schneider, an independent trader who followed his father into the business, works just five hours a day. In his free time, while his non-trader friends are still logging in hours at the office, he goes out for big lunches, works out, takes naps and practices the piano. He also travels, most recently going on a two-week Mediterranean cruise in the fall. Next up: a trip to Hawaii this winter.
“It’s a very stressful job, and it’s nice to get away from it and go someplace warm,” Schneider said.
Part of that stress comes from the risks involved. Trading at the CBOT, the Merc or CBOE has as much risk as reward. Whether you’re trading for yourself or working for a big firm, your fortune depends on how lucky and how smart you are. A few bad trades, and you can lose your money as quickly as you made it.
Trader Harold Hutchings knows how it is to lose on the Board of Trade. Early in his career and giddy with new funds, Hutchings, now 33, went out and bought a Cadillac. Two days and a whole lot less money later, he was back at the dealership, begging them to take back the car because he wasn’t going to be able to afford the payments.
He didn’t make the same mistake twice. Six months later, he went back. This time, he wrote a check for the whole amount.
“What you have now you might not have next month,” Hutchings said.
Several years ago, Hutchings, who owns his own trading firm, suddenly found himself without access to cash. With no money for food, he lived off what he had in his Gold Coast apartment–champagne and caviar.
Hutchings said he’s more disciplined now about his trades. He’s not scrimping on his lifestyle, though–his company is successful, and he enjoys rewarding himself. He has a penthouse, and several times a week he eats dinner at Gibsons, enjoying three-olive martinis and lobster tails. And he usually has an assistant pick him up a Gibsons steak for lunch.
“Anything I want to do in my life I can do,” Hutchings said. “That’s fun.”
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So you want to be a trader?
Get a taste of the business with an introductory course taught by a longtime Chicago trader at his training school, called the University of Trading.
Mickey Hoffman, who owns his own trading firm and is a member of both the CBOT and the Merc, will show you how to get started in the business, whether you’re interested in the increasingly popular electronic trading or in the traditional trading pits.
The classes focus on practical matters–the fundamentals of making trades, setting up your own business and managing risk so you don’t lose it all.
“We give someone the opportunity to understand the business from the inside,” Hoffman said.
Hoffman, who worked as a high school vice principal before trading, said he started the school in the early ’90s because he didn’t have anyone to explain things to him when he started trading in 1981.
The intro classes run once a month and cost $150; more in-depth courses cost more than $1,000.
For more information, check out www.universityoftrading.com.
— Kathryn Masterson
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By the numbers
4
Number of major exchanges in the city, including the
Chicago Board of Trade, Chicago Mercantile Exchange, Chicago Board Options Exchange, Chicago Stock Exchange.
150,000+
Number of jobs created in the area by the four exchanges, according to the Civic Committee of the Commercial Club of Chicago.
3,612
Number of CBOT members.
$1.4 million
Recent price of a Board of Trade seat.
$463 trillion
Value of trades made at the Merc in 2004
1,393,393
Average contracts traded daily on CBOE in ’04.
100,000
Reported circulation of Trader Monthly magazine.
$400,000
Average annual income of a Trader Monthly reader.
Late 20s
Average age of a Trader Monthly reader.
Sources: CBOT, CME, Trader Monthly
