Crank, Booze and Matching Option Order Tickets by Hand

A clerk's life at the PHLX options market in the 1980s

Prior to the late 1990s, trading floor (stock, option and futures) orders were hand-written and handled manually. The trades were written on multi-copy order tickets. Prior to the development of no-carbon-required forms, carbon paper was slipped between the pages of the tickets. Writing an order could be a messy task.

The markets in the 1970s and 1980s were fast and loose places. Cocaine, quaaludes and crank were sometimes abused on the floor and offices. Booze flowed freely. If you pair the manual task of trading and record keeping with drunk, stoned or high market personnel the likelihood for disaster is high.

Danny Sullivan, a former clerk on the Philadelphia Stock Exchange (PHLX) explained how folks tried to avoid financial ruin. It wasn’t always easy.

Sullivan (Sully) came from a trading family and was hired in 1979 straight out of high school to work the Philadelphia Stock Exchange’s options markets for Janney Montgomery Scott. The Philadelphia Stock Exchange is America’s oldest stock exchange, now a part of NASDAQ, and at the time hosted trading in stocks and stock options. In those years, you didn’t need a degree to work in the markets. You needed to be quick and street savvy. Having a family connection was a huge help.

“I was a crappy student, there was no college in my future,” he said. “I graduated on Friday and started on Monday as a ticket runner.”

He was introduced to drugs early. “My first week on the PHLX, my boss hands me a bag of 100 quaaludes to give to my brother. My first fucking week!”

(Author’s note: By the time I reached Chicago in April 1989, the futures markets floors were pretty clean. The drug and alcohol abuse mostly occurred away from the floors.)

Despite its efficiencies, open outcry trading was a fault-prone system. In busy markets traders mixed up prices, trade volumes, contract months, option type and counterparties. Ideally, checking their trades resolved these mistakes before the completed deals were given to the back offices to be entered into computer systems and sent to the clearing house.

Trade order management was a laborious and analog task. Legions of clerks were hired by traders and brokerage firms to handle this paperwork. The opportunity for error didn’t end when the order ticket left the pit. The deal then was typed onto computer cards using a keypunch machine.

At the PHLX, many of the keypunch operators were women. They dabbled in drugs, specifically crank (methamphetamine).

According to the U.S. Drug Enforcement Agency crank can be used as a: powder, pill, smoked, snorted, or injected. To intensify the effects, users may take higher doses of the drug, take it more frequently, or change their method of intake. It is highly addictive and can result in agitation, increased heart rate and blood pressure, increased respiration and body temperature, anxiety and paranoia.

For the keypunch girls, “50 percent were doing crank. They’d go into the bathroom, do some crank and then type like crazy,” Sully said.

After the markets closed then the fun part of sorting out the day’s trading started. Many clerks while waiting for the daily run to come down from upstairs would kill time in a nearby watering hole. When the run came down at 6 pm, the managers recalled unhappy clerks.

The daily run was a the process of matching the day’s tickets against what the keypunch operators had put in. “It was extremely tedious and time consuming. No one wanted to do the run. This always was the clerk’s job. The traders went home,” he added.

It could take an hour or more to complete the run.

In the early 1980s, a five- or 10-lot was a big trade. Most of the transactions were for one or two options. That was a lot of paperwork. Mutinies amongst Janney’s disgruntled clerks were common.

If an erroneous deal slipped through this review process, the result was a condition called an out trade. That was a trade mismatch that had to be cleared up before either trader could return to the markets the next day. Out trades were to be avoided. “They always went against you,” Sully said.

Out trades were resolved every morning at all exchanges prior to the open. (Author’s note: I recall that the Chicago Mercantile Exchange would announce early out trade sessions after heavy trading sessions. Special clerks, called out trade clerks, would have to come in as early as 3 am or even 2 am to clear the trade mismatches.)

We’ll talk more about this in a future blog.

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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(at)gmail.com

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