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Hedging Stress

Cigars Ease the Tension for the Big Dogs on Chicago's Futures Exchanges
Alejandro Benes
From the Print Edition:
Pierce Brosnan, Nov/Dec 97

(continued from page 5)

"It's stressful," Baldwin says of trading. "The actual trading part is not as stressful as the physical part of it because the trading conditions are so miserable, standing there packed in the pit. That's so uncomfortable, that's the worst part." Baldwin is 5-foot-10-inches tall and slender, but the pit is full of much bigger people, some of whom are former college basketball players.

On this day, the Greenspan statement has struck at the heart of the T-bond pit: the "benchmark" 30-year Treasury bond suffers a one-day loss of 1 1/2 points, the biggest price drop in seven months. Many of the "big dogs" howl as prices drop steadily with few chances for recovery. Some traders already held positions or took positions early that morning in anticipation of what the market would do that day. Others would wait, but most of those who had bought at higher prices spend the day frantically looking for the nearest exit, the smallest loss. At moments, "open-outcry" trading looks more like roller derby.

Even if you handle the stress well, fame and fortune can create their own form of anxiety.

"The pressure of the lifestyle is more in defending it," Baldwin says passionately. "Yeah, you can travel here and there and you can buy any car you want, buy any house you want. Once you've done that, then what do you do? Then it becomes, 'Well, I'm supposed to defend it.' Estate planning, taxes, you know, somebody falls down on your property, they sue you. If you're Dennis Rodman [of the Chicago Bulls] and you kick somebody, then you get sued. Well, if you don't have any money and you kick somebody, it's no problem. And because you have money, you get held to a different standard. You become a target. It's very frustrating."

Baldwin's assessment of the pressure is uncommon among traders. Most say that handling the stress is their biggest challenge.

"The stress is tremendous at times. Wouldn't you say?" Dick Friedman is asking his friends while they have breakfast at the Ceres Café on the ground floor of the CBOT building. Friedman is an options trader on the CBOE.

"He's not stressed out at all," responds Neal Shamis sarcastically. Shamis was Friedman's fraternity brother at Indiana University and is also an options trader.

"When you find yourself trading an order and the next thing you know you find yourself down $7,000 in a minute and a half, that's stressful," Friedman emphasizes. "I have lost my hair. I smoke more cigars. I exercise a little bit more than I used to. I find that helps some. But the nice part of this job is--and you gotta learn this early--when the day's done, you gotta leave it at work. And I think most people are pretty good at doing that. I'm fairly good at it. When I go home and see my kids and my wife," he pauses, "or see my kids." Friedman laughs at his own joke. "No, I'm just kidding. You just forget about everything. It's nice. There's not a lot of places, even though you take the risks that you take and the stress that you undergo, there's not a whole lot of places in the world where at the ages we are you can be your own boss. You call your own shots. You're effectively managing your own business."

Friedman, 37, Shamis, 37, and Dan Dougherty, 38, all smoke cigars. "My favorite cigar is the Avo No. 2, which I am pretty religious about," Friedman says. "I really like that. In the summers I switch to the Avo No. 3 because I have time to sit out on my porch at home and enjoy that for a good length of time. During the winter I'm usually confined to my office. I go up to my office to get a break from the stress and sit back, maybe take a look around the Internet, play some games, take an hour and smoke a cigar and relax."

"And you've got your quotes up there so you can stay in touch with your business," adds Dougherty.

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