Happy Birthday City of London

20 years ago today: the Big Bang. Some great quotes in today's papers about how things used to be:

"Terry Smith, the chief executive of the stockbroker Collins Stewart, was running the financial desk of BZW in 1986. 'If you wanted to trade before Big Bang," he said, "you had to pick up a radio telephone like the ones aeroplane pilots use today and call the Stock Exchange.

'You'd get a pause of about 10 minutes while they went around jobbers and came back with a quote. You'd ring the client to get authority for a trade, then ring the broker again to agree the price. This whole palaver took ages.'

David Mayhew, who was working in sales at Cazenove & Co in 1986 and now chairs JP Morgan Cazenove, added 'In foreign exchange and the gilts market, after Big Bang we had 28 market-makers, compared to four beforehand. There was an opening up to competition.'

The average daily number of equity trades on the London Stock Exchange has grown from 20,000 in 1986 to 313,000 on the SETS (LSE's electronic order book trading service for UK blue chips) order book nowadays, while the average daily value traded has mushroomed from £700m to £5.8bn. Last year, there were 30m trades that didn't go through SETS, in addition to the 51m that did."

there is certainly lots of back slapping in the media, and forecasts that London will overtake New York as the global hub

Jack o'Clubs said:

'You'd get a pause of about 10 minutes while they went around jobbers and came back with a quote. You'd ring the client to get authority for a trade, then ring the broker again to agree the price. This whole palaver took ages.'

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So a bit like using Finspreads today then

finspreads modelled themselves on the City - pre 1986

In pre big bang days there did exist a system of close circuit screens that showed the latest prices.

However when a client phoned in with an order the drill was to rush to the trading floor and check the current prices to get the touch, which was the inside bid and the inside ask.

The procedure was to approach several Jobbers (now called marketmakers) in person to seek price and size.

It would run something along these lines:~

"Good Morning Sir"

"Yes, young man......"

"What are XYZ please ?"

The Jobber would pick up a hefty ledger and fllick to the folio listing XYZ.

He would then reply:~

I make them 432 - 4 ( meaning 432 bid - 434 ask)

Several other Jobbers would be approached with for example the resultant prices 431 - 33, 432.5 - 434.5, and 430 - 33.5

The touch would now be 432.5 - 3 obtained from the third and second Jobbers approached.

One of them would have to be revisited.

The renewed discussion would now have been along these lines:~

"Please Sir....."

"Yes young man...."

"Are you still making 31 -3 in XYZ ?"

Reply: "Yes ....is it firm ?"

"Yes Sir we can make progress hopefully"

"Are you a buyer or a seller ?"

"I am a buyer Sir"

"Are you many ?"

"I am thirty thousand"

"I can make you 2 and a half now...does that suit you ?"

"Yes Sir, thank you, I will buy thirty thousand at 2 and a half."

"Done !...thirty thousand at 2 and a half in XYZ it is..."

Now the dealing box had to be informed by radio that the cient's order to buy 30/- had been filled at 2 and a half.

The whole process took minutes, interspersed with other orders to buy, to sell, and to obtain latest price and size in moving stocks and generally keep up with what was going on in the market, both specifically and generally.

It meant one walked an average of 5 miles a day on average, much more on very busy days.

>>>>From the days that shoes had laces, trousers had braces, ties were quiet, everyone knew his place and everything ran like clockwork .:cheesy:

SOCRATES said:

In pre big bang days there did exist a system of close circuit screens that showed the latest prices.

However when a client phoned in with an order the drill was to rush to the trading floor and check the current prices to get the touch, which was the inside bid and the inside ask.

The procedure was to approach several Jobbers (now called marketmakers) in person to seek price and size.

It would run something along these lines:~

"Good Morning Sir"

"Yes, young man......"

"What are XYZ please ?"

The Jobber would pick up a hefty ledger and fllick to the folio listing XYZ.

He would then reply:~

I make them 432 - 4 ( meaning 432 bid - 434 ask)

Several other Jobbers would be approached with for example the resultant prices 431 - 33, 432.5 - 434.5, and 430 - 33.5

The touch would now be 432.5 - 3 obtained from the third and second Jobbers approached.

One of them would have to be revisited.

The renewed discussion would now have been along these lines:~

"Please Sir....."

"Yes young man...."

"Are you still making 31 -3 in XYZ ?"

Reply: "Yes ....is it firm ?"

"Yes Sir we can make progress hopefully"

"Are you a buyer or a seller ?"

"I am a buyer Sir"

"Are you many ?"

"I am thirty thousand"

"I can make you 2 and a half now...does that suit you ?"

"Yes Sir, thank you, I will buy thirty thousand at 2 and a half."

"Done !...thirty thousand at 2 and a half in XYZ it is..."

Now the dealing box had to be informed by radio that the cient's order to buy 30/- had been filled at 2 and a half.

The whole process took minutes, interspersed with other orders to buy, to sell, and to obtain latest price and size in moving stocks and generally keep up with what was going on in the market, both specifically and generally.

It meant one walked an average of 5 miles a day on average, much more on very busy days.

>>>>From the days that shoes had laces, trousers had braces, ties were quiet, everyone knew his place and everything ran like clockwork .:cheesy:

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Exactly as I remember it from my Jobbing days. Excellent.

CT

lol. liffe went like this:

broker: DEC 8-9?

local: TAKE 'EM.



note there is no size need be quoted if it is the standard size for the pit, otherwise, size would be. also, there is no need to discuss the asset - as that is defined by the pit you were in. no need to ask round the houses either. if you want a bit of the action you just shout it out. you want in, you get in.

trading was a lot quicker and more efficient. we didnt have time for a cup of tea and a scone unfortunately.

>>>>>back in the day when ties were loud, geezers were proud, and everything ran fuelled by larger and a doris in the evening! LOAAAAAAAAAADS A MUUUUNEEEEEYY!

i'd say liffe had a bigger impact than big bang in terms of londons strength as a financial capital - maybe i'm biased?

charliechan said:

i'd say liffe had a bigger impact than big bang in terms of londons strength as a financial capital - maybe i'm biased?

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I wouldn't diasgree at all. LIFFE rattled the foundations of The City. I was evolutionary for the City