Chicago Pit Traders Have Weathered Worse Than an Arctic Freeze

(Bloomberg) -- Scott Shellady, known in the trading pits of Chicago for his trademark “cow jacket,” isn’t going to let a historic blast of Arctic freeze on Wednesday keep him away from the options pits at the world’s largest derivatives exchange, even though many of the city’s workers are planning to hunker down at home.

“I come from a family of farmers,” said Shellady, who commutes into the city from northwest Indiana. “And there’s a word in English that describes the weather we’re having. Winter.”

That may be a bit of Midwest meteorological bluster. The brutally cold weather is expected to make temperatures warmer above the Arctic Circle than in Chicago. It’ll be 21 degrees below zero Fahrenheit (minus-29 Celsius) in the Windy City on Wednesday and minus-24 on Thursday, according to forecasts. The city’s all-time record low is minus-27, set in 1985.

But traders are a resilient bunch, said Shellady. After all, in recent years they’ve endured worse, like the closure of most of the Chicago Mercantile Exchange’s futures trading pits.

P.J. Quaid, a corn options broker, said pit traders have to be in the pit. Otherwise, competitors could try to poach clients. He recalled February 2011, when a storm dumped two feet of snow in Chicago and firms “took out hotel floors because they had to be there for work,” he said. In case his car doesn’t start on Wednesday, he has another one in the garage.

“I’m gonna be there,” he said. “You just dress warm and go. That’s part of being an options broker.”

No-Shows

Virginia McGathey, president of McGathey Commodities, will also be trading in the options pits as usual, working with a skeleton crew. Still, there will be some no-shows, she said, as Wednesday could be the perfect snow day. The markets have been slow, with the lack of information due to the government shut down.

“It’s going to be like sitting around and watching paint dry while watching to see if the government numbers are actually going to come out,” McGathey said.

Other companies aren’t toughing it out, though. Alan Reed, executive director of the Chicagoland Food and Beverage Network, canceled a Wednesday evening event for the industry. Their venue, WeWork, won’t be staffed, he said, and those who registered from companies like The Mars Wrigley Confectionery and Kraft Heinz Co. called in to cancel.

As of late Tuesday morning, 1,053 flights around the U.S. had been canceled, with the majority of those in Atlanta and Chicago. All Chicago Public Schools will be closed Wednesday due to the cold, and possibly Thursday as well.

Technically, it could be worse. The temperature Tuesday at the South Pole was minus-29 Fahrenheit.

But then there’s the wind-chill warning for Chicago, which begins at 6 p.m. Tuesday and lasts until noon Thursday. Wind chill at the South Pole is minus-52. At its worst this week in Chicago, it will be minus-50 to minus-55.

So it will feel like the South Pole.

--With assistance from Brian K. Sullivan and Deena Shanker.

To contact the reporter on this story: Lydia Mulvany in Chicago at lmulvany2@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Flynn McRoberts, Steve Stroth

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