Online Trading Academy in the News

2007

06/11/2007

BEST TRADING CITIES #1 CHICAGO

If the Good Lord were a speculator — and, given the steep odds against a spasmodic celestial mess of metal and dust particles coalescing over billions of years into an inhabitable planet, we’re assuming He likes to play long shots — and decided to pay earth a visit, we bet His first stop would be Chicago. When it comes to the world’s best cities for market movers, our rankings confirm what many mortals already know: This place is trader heaven.

“Chicago is ideal — economic strength and an enhanced quality of life,” longtime mayor Richard Daley told Trader Monthly when informed that his city had secured the coveted top spot on our list. Chicago Merc legend Lewis Borsellino concurs: “Trading is about discipline, perseverance and having a never-say-die attitude,” he says. “That all ties into the work ethic rooted in the Midwest. When Chicago burned down, it was rebuilt bigger and better.”

Trading isn’t just an important part of Chicago’s culture — it’s in the city’s blood. The ability to store and ship grain and other farm-produced goods during the heyday of the railroads in the 1800s made Chicago a living, breathing hub of commerce and birthed the modern commodities industry. The city itself arose on the shoulders of the two great commodities exchanges: the Chicago Mercantile Exchange and the Chicago Board of Trade. Trading titans such as Borsellino, Tom Baldwin, Leo Melamed, Joe Ritchie, Blair Hull and Richard Dennis all got their start on the floors, gladiators’ arenas where men once lined up starting at 4 a.m. just to mark their spot with tack and trading card.

Over the years, a bustling community of speculators, brokers, clearers, custodians, independents, money managers, CTAs, tech providers and tangential players grew, and to this day those groups make up the solid, stable core of Chicago, creating a trading mecca that has, in turn, spawned a citywide ethos of expansion and innovation. Archipelago, the electronic exchange that upended the way the equity markets do business, was conceived in a trader-filled room here. The Eurodollar, the futures contract that makes the world go ’round, was born here at the CME, in the largest trading pit known to man.

Couple this vibrant trading community with a relatively affordable cosmopolitan setting (replete with a knockout combination of beachfront tranquility and big-city nightlife), prime access to capital and world-class financial-services infrastructure, and it’s obvious why “Sweet Home Chicago” is music to so many traders’ ears. “As surfing is to Southern California and skiing is to Aspen, trading is to Chicago,” says options-industry elder statesman Charles Cottle, who traded (and trained traders) in dozens of cities around the world during his 25-year career — and, in the end, always came back to the shores of Lake Michigan. “With the futures industry headquartered here and all those transactions, it’s made us a center for global financial services,” says Representative Danny Davis (D., Illinois), whose district includes downtown Chicago. “It’s the city of big shoulders.”

In our rankings, Chicago didn’t crush the competition in any one category; rather, it fared so impressively across the board that it was able to pull out the top spot from among the extremely competitive “Big Three” cities — and did so even as London and New York are witnessing a barely comprehensible influx of trading wealth. For example: As tax burdens go, Chicago is no St. Thomas or Singapore, but among U.S. cities, it offers more bang for your buck than New York or even Greenwich, Connecticut. Similarly, Chicago real estate can get expensive — but rents and sale prices here are practically youth-hostel rates compared to London, where even relatively wealthy traders are increasingly finding the cost of living untenable.

Traders love action, of course, and in Chicago’s vicinity reside no fewer than 16 gambling halls and casinos, some of which float offshore on Lake Michigan. The city’s prime waterside location — ideal for sailing, volleyball, beach bars and anything else even remotely aquatic — is another big plus.

Looking to blow off a little steam? Chicago certainly has no shortage of “put” options — as in belly up to the bar and start putting them back. “Chicago traders are of a particular makeup,” says Dan Rosenthal, owner of Poag Mahone’s bar, located right across from the CBOT. “They trade hard, play hard and drink hard. They know what they want, and they go get it.” Sold.

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