Earth 64165 640

Every Lehrling’s Dream- Becoming a Trader

December 6, 2016

Chapter 35  in the exclusive series for Dynamic Commodities- becoming a commodities trader

I was the last lehrling that came through Mildred Epstein’s traffic training department. This made me the last apprentice to ever reach the pinnacle of Philipp Brothers, which was a job as a trader.

One of the first things John Gruen did when he assumed Ray’s old job was to promote me to the trading area. John was an aggressive guy with a great sense of humor. John draped his humor in sarcasm. He was wickedly smart and loved to argue and debate just for sport. He could take any side in an argument just to outwit and verbally crush his opponent into the ground.

Sid Gold had come over from Salomon Brothers a few years earlier to start a new business for the commodities segment in options. Options were a new and exciting area for the company. The Commodities Exchange (COMEX) began trading gold and silver options. Sid headed up a small desk that traded arbitrage between the COMEX options, futures and the physical unallocated gold and silver traded by the department. Sid was the only person in the firm that had a computer on his desk; his business was complicated, mathematical and highly technical.

Options were expanding as Exchanges all over the world were opening contracts on a vast array of commodities in the world of metals, agricultural products and other raw materials that traded in the futures markets. I knew less than nothing about the options business when John told me I would be working with Sid and his assistant trader, Ralph Mizrahi. I did not even know what a call or put option was. In the precious metals traffic area, I had never handled the operations and settlement procedures for options. John told me that Sid wanted someone green, a fresh mind that he could train himself.

Sid had been asking Ray Nessim for help for over a year as his options business was expanding. He wanted to move away from just gold and silver options trading and handle other commodities the firm traded. However, Ray resisted and did not agree to increase headcount on Sid’s desk. To Ray, options were still in the experimental stage. On John’s first day in the job, he gave Sid the OK to expand the department by one junior trader. And I got the nod.

It would take a week or so for me to transition over from traffic to trading. Elias was so busy because of several recent departures from his area. John took me for a walk right after promoting me and said something like this, Sid is a very difficult character. If you have any problems with him please come to me immediately. Later that day, Sid called me over and told me, You will be working for me and loyalty is the most important thing. I do not want to see you talking to John Gruen. That is my job. I shrugged it off. Of course, I would be loyal to my new boss. However, it was a glaring sign that there was no love lost between the two traders. I had no idea of the political nightmare that would eventually evolve in the department.

As I rode the train home that night, I was elated and scared at the same time. I got my wish, I would be a trader but I would not be trading a commodity. Rather, I’d be trading an esoteric derivative. In 1985, very few knew what options were and I was one of the ignorant.

Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities

Post Series: Origin Of A Commodities Trader

Leave a Reply