The Kansas City Board of Trade went dark on Friday, as its new owner, the Chicago Mercantile Exchange, pulled the plug on the whole anachronistic operation just as quickly as it could. This led to some embarrassing and decidedly un-Midwestern displays of emotion on the part of the two dozen people who remained in the pits until the long-overdue bitter end.
Of course, they all saw it coming. After all, the KCBOT’s killer was an insider. Then again, it wasn’t always the quickest on the uptake.
The financial sector, underpinned by decades-old investment firms like Waddell & Reed Inc. and American Century Investments and brokerages built around the wheat exchange, has made room for new entrants like high-frequency trading firm Tradebot Systems Inc. and BATS Global Markets Inc., an eight-year-old electronic exchange company that ranks among the world's busiest stock-market operators.
Tradebot and BATS were both started by David Cummings, a former member of the Kansas City Board of Trade who quit the exchange in 1998 to put computerized muscle behind his trading strategies.
"It was a cool place in the day, and it was where I learned to trade," says Mr. Cummings. "Technology always marches forward…."
Some Kansas City locals say the exchange was known for a more "gentlemanly" style of trading than practiced by their peers in Chicago and New York, a culture reinforced by the fact that many of the traders and exchange employees went to the same high schools in the area.
The exchange perhaps was too guileless at times. A Soviet film crew sought permission to film trading at the exchange in the 1980s for what the producers said was a documentary about the U.S. grain industry, but turned out to be a propaganda film that derided capitalistic Americans fighting to trade loaves of bread.
Pits Go Dark in Kansas City as Storied Wheat Exchange Closes [WSJ]