Smith Barney exits the trading floors: eyewitness photos

Traders and employees at the Smith Barney S&P and S&P option desk shut down their desk on the floor of the CME Group. The ironic part: the EXIT sign below their desk was the last thing they saw as they exited the trading floor.

In a sign of the times, Morgan Stanley Smith Barney pulled all its employees off all the remaining futures and option exchange trading floors in both New York and Chicago. As the business shrinks and more futures and options trading is done online, several of the big firms are questioning the relevance of having people on the trading floors. Some of the floor people we talked to said the Smith Barney exodus includes up to 600 people between all exchanges.

Somber faces

Many of the people we talked to made light of the move, saying it was off the floor to an office, not out of a job. Others grumbled that the floor is the a hub of information that they will now be cut off from. While some employees have lost their jobs, most “producers” got offers to do the same thing they do from the floor in an office. While many of these desk people have been on the floors for 20 to 40 years, none expected it to end like this …

CBOT member and assistant VP Dom Carnahan cleaning out his desk in the grain room just before exiting the floor. Don started on the floor in 1973 at EF Hutton.

REI checking out his last order on the floor before saying goodbye to the floor.

Not the first or last to leave …

Smith Barney is neither the first nor the last firm to exit the trading floor. Firms like global investment bank Credit Suisse First Boston have been cutting staff for years. CSFB is set to shut down its only remaining keypunch operator. It’s rumored that ADM, which shut down its index operation, is preparing to wind down the rest of its floor operations at the end of 2013. We suspect many other firms are considering doing the same thing.

7-13-2008 Numeric Clearing Member List

When I started on the floor of the Chicago Board of Trade grain room back in 1978 there were over 500 clearing members between the CME and the CBOT. The CME’s 2008 clearing list included several clearing firms and hundreds of sub-clearing firms, and now the list is down to 61 full clearing firms but only 10 that a small customer can open a futures and options account with. See the list for yourself here.

MFGlobal and PFG: Hurrying the pace

Many years ago a CBOT clearing firm by the name of Stotler went out of business, locking up millions in customer funds from months, but eventually most of the losses were resolved. In stark contrast, the damage Jon Corzine’s MF Global and Russ Wasendorf’s PFG did to their customers and the industry is a black eye that will never go away. At a time many firms and individuals were already struggling under the weight of the credit crisis, MFGlobal and PFG have also helped speed the decline of the trading floor as more and more prefer to use an electronic platform over the pits of the CME.

Floor haters

While we know there are a lot of “floor haters” out there, we do not feel we have to defend ourselves or the place we work every day, helping move billions of dollars of the global economy safely and reliably. The trading floor of the CME is still one of the greatest places in the world for futures and options traders and that is not going to change anytime soon. The “Top Step” in our name comes from our position at the top step of the trading floor, overlooking all the action and reporting it to you. It’s a position of honor,  because of our years of experience, and we’re more honored than ever to hold it.

The rumor on the floor why Smith Barney is shutting down its floor operations is because the head of futures in London had a bad experience with using the floor and is “yanking” everyone off. We called London to verify the rumor and when we asked for the head of futures they referred us to their compliance department, who told us they were closed for the day.