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Trade Talk Blog: Breaking Through: Margie Teller, Part 1


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margie teller

Throughout my time in fintech, I’ve had the privilege of working with some strong female role models. However, and specifically in the world of trading, the female point of view rarely gets exposure. That’s unfortunate, as some of the best and biggest traders have been and are women.

To that end, this fall we’re releasing a series of interviews with women who have helped pave the way for the current generation of female traders. For this first installment, I spoke with Margie Teller, a former CME floor trader whose trading achievements earned her a formidable reputation, an induction into the FIA Futures Hall of Fameand a nickname to boot.

We expect you will enjoy this series titled “Breaking Through: How Three Women Took on the World of Trading,” which presents three very successful female traders who have unique career paths and viewpoints to share.

– Kara Grygotis, VP, Customer Success

Kara: It would be helpful if you took us back to the beginning of how you got started in this industry.

Margie: Well, I fell into this industry by accident. I started interviewing for jobs out of collegeI graduated from college in 1984, which was a recession year. I had a lot of fun in college, so I had a middling…I didn’t have the highest GPA, and yet I wanted to get into Wall Street. I really wanted to get into Wall Street. And so I had a wall of rejection letters, and I got one offer from O’Connor and Associates, which later turned into Swiss Bankthe greatest option trading firm in the world. I came to Chicago for the interview, not even knowing that Chicago is on Lake Michigan, and I ended up moving here. I thought I’d be here for a year or two, then get myself back to New York. And it turned out I just had a knack for the business. I started in optionsI traded options for O’Connor for a couple years, and then went on a percentage deal and worked my way up into bigger and bigger percentage deals until I had enough capital to trade on my own. During that procession, I started in Eurodollar options, moved to the Deutsche Mark options almost immediately, and then went in the Deutsche Mark futures pit. All I wanted to do is get over to the Eurodollar pit because in this business, you have to follow the money. But unfortunately, in the interim, I had to have back surgery as I had curvature of the spine. It took about five months of recovery before I was well enough to be able to move into a physical pit. I moved over to Eurodollar futures, and I spent the bulk of my career in the back of that pit trading in the last nine years of the curve. The interest rate futures curve. That’s how I ended up there. And then I retired, and came back. And retired, and came back.

Kara: Seems to be a theme.

Margie: And retired again, and went over and traded the soybean crush for a little while. Which was fun but not exactly profitable. And finally retired for real in 2010. That was the last time I set foot on the trading floor.

Kara: So you retired, came back, retired, came back. Tell me a little bit about that. What kept pulling you back to trading?

Margie: Well, if you’ve ever been on a trading floor, you know what keeps pulling you back. It was the most exciting place in the world. And there’s nothing that can fill that void. Absolutely nothing. It was the greatest place to be as a kid, a young adult, and a middle-aged adult. The first time I retired was right after 9/11. Well, not right after 9/11, because I had on an enormous position during 9/11, and it was like musical chairs, and then the music stopped. 9/11 was a really quintessential moment for me. Because we knew people in the towers, and we knew people who were on the phone with people in the towers. I was in my 30s with a young kid. I’m like, “Why am I doing this? Why am I doing this?” And these people were here and doing the same thing, and then they’re gone. And the positions I had on were so big that every day I was so stressed. So I was like, “I need to get out of this, I need to get out of this.” I started shopping my position with everybody. And once you start shopping your position, you were dead, because everybody knows your position. Finally, I found someone to take the position off. And nine months later, I was gone.

I finally sold my seat, to tell the Merc that I was serious about leaving, because they were like, “You’re not leaving, you’re not leaving.” But I left. And they actually came back with a deal to induce me to come back, so that was the first time I came back. They paid me per contract to come back. So I came back and I stayed for a couple of years while the markets were still good on the floor, until they started drying up. Then I left because I quickly got bored. I started dabbling in trading on the screen, and I did that until that became really expensive. It got to be a very expensive hobby, and then I quit again. After I’d taken a couple of years off, a friend induced me to come back and trade the crush spread, which was a different floor and a physical commodity, something I hadn’t actually traded before. That was kind of fun, but I said, “You know what? I liked my retirement. It was good. I prefer not to give it away.” So I left for good.

Kara: You had a nickname on the floor: “Large Marge.” How did that nickname come to be?

Margie: I don’t actually know how it came to be. But I imagineeverybody had to have a nicknameit probably came from the amount of size I traded. At one point I was doing 10% of the volume in Eurodollars. Which was crazy. I look back on it now, the sheer hubris of it, and I’m like, “You were an idiot. You were an absolute idiot.” But once you get in, it’s like the proverbial frog in the water. You sit there and the water keeps heating up, and you don’t realize how hot the water is until there’s steam coming out around you. And at that point, you can’t get out because your positions are so big. Every day you’re fighting to maintain the price on this or that, having screaming matches, and almost fist fights. But you have to do it, because you have positions bigger than most of the banks. So every day, settlements. We would sit there and literally scream for half an hour. One tick made such a difference in your P&L, and you had to mark it so that you could try to get out of it the next day. The more you mark it your way, the more whoever’s on the other side would say, “Ugh, I’m getting tired, I’m getting tired of it.”

Kara: Do you think you could do that today, at this point in your life?

Margie: Absolutely not. You really have to think that somebody’s taking the food out of your baby’s mouth. That has to be your mentality every day. You have to get in there and scream for the trade. If somebody screws you on a trade or doesn’t see you on a trade, you have to literally be in their face. You have to defend your real estate. There were so many moving parts that once you stop, it’s very hard to get that feeling back.

Kara: Did I read that you took voice lessons?

Margie: I did take voice lessons. When I first came down to the pit, I was 22, and 22-year-olds don’t have the deepest, loudest voices. When I had the back surgery, I grew two inches. But before the back surgery, I was 5’4”, and everybody else was a monster. Every day, I would come home with laryngitis. Every day. I’d have hot tea, honey and lemon. It’s very hard to tradeespecially when you’re a newer traderif people can’t hear you. I mean, you have to be right in front of them. So I’m like, “I have to do something about this.” I took voice lessons, and there were probably eight to ten of us in the class. It was actually quite funny to hear these big guys doing all the exercises, voice exercises and yelling. But it actually worked. Because I can still hail a cab from about two blocks away.

Kara: Were they doing it for the same reason?

Margie: Yes, yes.

Kara: Was there a special voice coach for people in the pit?

Margie: There was a special voice coach just for traders.

Kara: What did they teach you?

Margie: They taught us how to emote. For example, instead of saying “sold” with an “s,” you’d say it with a “z.” If you said it with a “z,” you could say it much louder. There are all these little tricks that we learned. Another one was how to use your whole body to yell, and to not put all that strain on your vocal cords, but do it more from the diaphragmmuch like opera singers. It actually was helpful because our pit was located in the very back corner of the Eurodollar pit. If you wanted to get the attention of somebody who was further forward, you really had to be able to yell. But I had the added advantage of having a high-pitched voicemy voice was significantly higher than anybody else’s. Especially when I got really upset.

Kara: What was the upside of being a woman in there?

Margie: There were many upsides of being a woman in the pit. But having a high-pitched voice, which was unusual for the pit, was probably the biggest advantage.

Kara: What else?

Margie: Actually, that was not the biggest advantage. The biggest advantage of being a woman in the pit, and being one of the few women in the pit, is that I didn’t have to have the same ego that the guys had. I could let something go and not feel embarrassed. I could just shake it off. Now, at timesand it cost me dearlyyou would lose the ability to do that. But that ability to keep calm was really great. And the second greatest thing about being a woman in the pit? Women for sure are more intuitive than men. So I could look around and say, “This guy is nervous about something. I see he’s nervous about something.” He’d ask for something, and I’d think, “Okay, I know that he’s got to dump, buy or sell a ton of stuff. I’ve got to pay attention to this and figure out where my outs are before anybody else figures this out.” It was really an advantage to me. I think it was really an advantage to be a female down there. People always said, “Oh, it must have been horrible being a woman down thereit just must have been awful. They must never have let you in.” But it’s like any placeeverybody gets hazed at first. They do everything they can to intimidate you and push you out. Then once you make the club, you make the club. And the bigger trader you are, the more they need you or the more they respect you. It just was not an issue after the first couple years.

Kara: What are some of your most memorable trades on the floor?

Margie: Most memorable trades. Well, you always remember the bad ones.

Kara: Right.

Margie: The most memorable bad trade I had was, there was a Fed meeting, and one of the big banks, I can’t remember which one, figured out that the Feds were going to do a rate cut before they did a rate cut. And I got picked off for 2,000 contracts in the Eurodollars. And Eurodollars went upI got out for like 15 ticks, which was about $750,000. In two minutes. The trading was so good around it, though, that I managed to get most of my loss back before the end of the day. But that was by far the worst one-second disaster trade.

I had a lot of positions, I mean a lot of positions, that went against me badly. And then there were certain events that you just couldn’t have predicted. There were certain events that caused really big spikes in the market, or really big downdrafts in the market. It was things that were out of our control in the pit that were the most damaging in terms of trades. One example of this was when the Long-Term Capital crisis occurred. I happened to be on vacation on an island with really bad phone service. I tightened up my position and I got it down to almost nothing. But that “almost nothing” was probably 40 or 100 spreads from the first year to the second year. And those spreads cost me $25k-$50k a day. So I’m like, “I’ve got to go. I’ve got to get back.” I managed to get back home, but the spreads were so out of control. And I had been getting at them over the phone from the island, one or two at a time, and paying up like eight or ten ticks to get out one or two at a time.

9/11 is a time I keep going back to because it really was a game changer. I’m sure anybody you talk to in the trading world will tell you that. On 9/11, it wasn’t the trading that hurt me, it was that feeling of just sitting there and knowing that we were within 200 yards of the Sears Tower. Everybody thought the Sears Tower was going to get hit. I had four clerks at the time and a partner I shared clerks with. And he, right after the second plane hit, goes, “I’m leaving. You’re an idiot. Get out of here.” But I felt like I had a responsibility to the market, that somebody had to be there to shut it down because I knew we weren’t opening for five days. Well, I didn’t know how many days, but I knew it wasn’t going to be the next day, and I knew it wasn’t going to be the day after that. I’m like, “Somebody’s got to shut this stuff down.” So there were four or five of us who stayed there in the pit. I told my clerks, “Look, you can go. I need one of you guys to stay, but the rest of you guys, get out of here.” And four or five of us shut down the floor. They said what time it was going to close, and it was a ghost town. I told my clerk to take the hard copies of the trading cards, and I took the dupes. And I said, “Find anybody at the clearing house you can find. Find anybody. And give these to them personally and say, ‘you’re in charge of these, get these in.’ And then tell me who that person is and then get the hell out of here. Get as far away from the Sears Tower as you possibly can.” That was a very, very memorable dayit was horrible. I mean, it’s just awful.

Other than that, though, there are so many trades that would go your way or go against you. One of the more memorable things that happened on the floor, trading-wise, was when I traded in the back months. I would always hedge my contracts with somebody in the front months who would fill the order for me. And one time, I did a big trade, and I had a 500 lot to sell. I kept yelling to the guy, “Where’s my fill, where’s my fill, where’s my fill?” Finally it slows down, I go up and I’m like, “I need my fill.” He says, “I didn’t fill it.” I’m like, “What do you mean you didn’t fill it?” We are now 20 ticks lower. I’m like, “Oh my God, oh my God, oh my God.” He waited and waited. I’m like, “You’re held on thoseyou gave me a fill on them.” He waited and waited and rode them all the way back up. All the way back up! But the whole time, I’m like, “Oh my God.” Because for him, if he doesn’t get that off, he is out. He’s done. And I’m looking for the money because he’s not going to have it. Things like that happennot oftenbut things like that happen on the floor. And you could always see the best of people and the worst of people when they were cornered. When they had a really bad trade. I saw some people react really, really well, and some people not well at all. But in general, most of the people down there were the most honorable people I’ve ever known.

Kara: That’s interesting. Oftentimes, people who worked on the floor were perceived to have questionable character. But you’re saying that really, it’s just the opposite, that you’ve met some very genuine people. Can you talk some more about that?

Margie: Well, I’ll tell you, when my daughter first got diagnosed with diabetes, I was in the pit. I came into work, and people were as generous as they could possibly be. Literally, they’re like, “How can we help? How can we do this?” And we started a benefitwe started walkathons right away. People just would hand me cash. If something bad happened to someone, everybody bonded together. And because trading is such a handshake business, and you have to get in the pit and look each other in the eye every day, there was no room to be a scumbag. People could be total scumbags outside the pit. I mean, who knows who was sleeping with whoever’s wife. But in the pit, a deal was a deal. And I would do business deals, and I still do business deals, with people from the floor who have transitioned to other businesses. I trust them more than I trust anybody. I have never gotten screwed by somebody from the floor. Other business deals, yes. Because they just don’t have the same type of knowingthat this person they’re making a deal with is someone they have to deal with every day. It was a very insular world. People who were looking at this world from the outside just didn’t understand it. There were a lot of people down there who weren’t educated, and there were a lot of people down there who were, quote unquote, dese, dem and dosers. But they were honorable.

Kara: Do you have any habits or rituals that you think helped contribute to your success on the floor?

Margie: I wouldn’t say habits or rituals. But I had a skill setI was really, really good at games, and really good at simple math, puzzles and seeing how pieces fit. So I could look at one piece of the yield curve and hear something else, and then put it all together and be able to price things faster than anybody else. Which was helpful, because you always want to be the first person to the exit. You don’t need to be the first person in, but you need to be the first person out. That’s always a good trait in a trader.

Kara: Tell me, are there any particular role models or mentors you’ve had throughout your career?

Margie: Role models or mentors? Not so much in trading. I think in terms of integrity. Obviously, your parents give you that. Every pit had its own personality. Every pit had its own leadership. Some pits were nicer than others, some pits were dirtier than others. I’d like to think that where we were, in the back of Eurodollars, was one of the better pits. It was one of the nicer pits, and definitely the cleanest pit. I definitely had to go through the same turnstile every day. I actually would rarely leave the pit. I mean, during the trading day, I didn’t eat, I didn’t leave. Because that one trade that you might miss would be the trade that could bail you out of the position. So you had to be there and just wait for it. Some of the stuff we traded was so illiquid. That one trade might only come along once every two weeks. You had to be there for that.

Kara: What advice would you give to someone who’s looking to go into trading?

Margie: Don’t do it. What I did does not exist anymore. What is left is not “trading,” in my opinion. It’s much more game theory, algorithm-based. I look at what we did down on the floor as something elsewe were insurers. We’d take people’s risk, they’d pay us a premium, and we’d absorb that risk and give them a hedge. I don’t think that type of trading exists any more. I don’t see it. When you have something like a flash crash and everybody turns off their machine, they’re not insurers. They’re not creating a market function. They’re trying to take their little piece off the top without giving some sort of value back. If somebody’s mathematical and they want to go into that type of world where you create the program and you beat the game, then yes, for surego into the trading world. But trading the way trading used to be just doesn’t exist any more. And for me, sitting in front of a computer screen all day is just not fun. I mean it was fun being on the floor. Well, not when you were losing money, but in general, most of the days it was fun. And it was social, and you know, people would joke around. You were rarely fighting against other locals. Everybody needed everybody else. I mean, you would fight for trades against other people, but you needed everybody to succeed. You wanted the customers to succeed. You wanted the customers to get a good fill and come back. And keep the market going, and keep the market in Chicago, and keep creating value here. So the more volume we had, the more money we’d make. It’s just a numbers game.

Kara: What’s keeping you busy now?

Margie: Well, I’m working on a bunch of stuff. I’m working on a benefit for diabetes. When my daughter got diabetes, she was 18 months old, and now she’s 21. I am chairing our tenth event, and it is on September 23 of this year. The theme is Mission: Possibleit’s a Bond theme-type of party, part of the Friends for the Cure foundation. And we’re trying to raise $750,000 at this party to benefit University of Chicago Medicine Kovler Diabetes Center. So far, our group has raisedbefore this event$3 million. It’s all for diabetes research, because it’s a really terrible disease, and I would like it to be over for her and millions of other people who suffer from it.


Look for the second half of this interview here on Trade Talk in the next few weeks.