And then there's the guy who loaded his silver futures delivery into the trunk of his car
In the last update of this blog Hey buddy, Where Do You Want Your Soybeans?, I wrote about how unlikely it would be for a commodity trader to receive a futures delivery notice unexpectedly. I heard of that happening, at least once. This is a story told to me. My recall of the details may not be complete. I’m not even sure what year this occurred.
The Chicago Board of Trade (CBOT) once traded silver futures. It was an early foray by the exchange away from agricultural products. The contract was launched in 1969. This was part of the flurry of interest in precious metals contracts. The CBOT’s market was smaller compared to the more-liquid contracts traded at the Commodity Exchange in New York. The silver pit was in a corner of the grain room at the CBOT.
As I remember the story, a floor trader received a delivery notice for a silver contract. The CBOT contract was for 5000 troy ounces of silver bullion. I’m not sure whether the trader held the contract through expiration intending to take delivery or whether he forgot that he was long the market and the delivery notice was a surprise. Regardless, he faced a decision: pay the fee to store the silver at the delivery point or take it.
The delivery point was a big walk-in vault in the exchange’s basement. The vault may still be there today. It does not hold silver any more.
The trader decided not to pay the storage fee and had to take the silver from the vault. At the end of trading day, he was seen running around the floor soliciting runners and phone clerks. He hired a few to load the silver, 343 lbs. of bullion, into the trunk of his car.
I have a mental image of him driving away from the exchange with the car’s rear end dragging on the ground.
What he did with it after that, I never found out.
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This blog is about more than my experiences. It is intended to be a collective experience of working on the commodity markets physical trading floor. If you or someone you know has a story please let me know I’d like to include it in this ongoing chronicle. I can be reached at linton122@gmail.com
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