INTERVIEW
Trading On The Market’s Edge
Tuning Into The Pits With Jack Broz
Amid these turbulent times in the market, Jack Broz is keeping an ear out on what’s happening on the trading floor. He has been a member of the Chicago Board of Trade (Cbot) since 1996 and has traded bond and Dow futures since then. He is founder of The Marlin Letter (www.themarlinletter.com), a trading advisory and education company and sole producer of the information content. Broz provides two live interactive, Internet-based trading rooms direct from the floor of the Cbot five days a week, seven hours a day.
Stocks & Commodities Editor Jayanthi Gopalakrishnan (JG) and Staff Writer Bruce Faber (BF) interviewed Jack Broz via telephone on October 10, 2008.
People have been trying to close the trading floor
for 15 years, but it ain’t going to close.
Jack, how did you get started in trading?
I ran health clubs for 15 years and noticed a customer one day who would always come in to work out, and then go surf. After seeing him do that for a month or so, I asked him what he did for a living. He said he traded options on the Oex. I knew nothing about the markets — this was in the mid-1980s — but I knew that options were something in the financial industry. So he took me under his wing a bit and started showing me some ways to analyze the stock market and suggested a few good books to read and a few good sources of information. For a year I studied charts, and I found I enjoyed it.
We were talking at one point about trading commodities, and he said that he would not touch them. So I figured that had to be where the money was really at, if someone who seemed to know what he was doing was wary of them. I was from Chicago, so I came back to Chicago. I thought that if I could get a job at one of the exchanges I could really learn this commodities stuff. So I got a job at the Chicago Mercantile Exchange to work in the pits as a price reporter.
JG: How was it?
As a Merc employee you could take every class they offered. I worked there eight years and I was good enough at my job that they made me an instructor to teach other people how to work on the floor. So after eight years of taking all these classes, and studying, and watching traders all day, and talking to a few traders who would talk to me, I thought I had it all figured out.
JG: And you didn’t?
At that time the Board of Trade had the evening bond session. I went to the Cbot and got a membership to trade the night bonds. When I walked in the pit the first night, I had no idea what was going on. Everything that I had learned in all the classes and all the books I read over all those years was nonsense. It wasn’t how the pros traded.