Economics

Remembering Futures Legend Les Rosenthal

It comes with a great sadness to learn of the passing of Futures Legend Les Rosenthal, who did so much to mold the industry into what it is today. For starters, he was one of the founders of the NFA, co-founder of clearing firm RCG, two-term chairperson of the CBOT, and had the vision to see the future of the futures industry was electronic trading.

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As most do, Mr. Rosenthal started his career in the business on the floor. Here’s FinanceFeed’s take of Rosenthal’s beginnings:

Mr Rosenthal graduated from Roosevelt University with a degree in history, and said that he simply “needed a job.”

He once explained that being a ‘runner’ was the only job he could find that would fit any program that was available to him during the early days of his career, and that at the time he didn’t have any prior knowledge. Excited by the future possibilities, Mr Rosenthal did not simply follow commands and consider it a mere ‘job’, but continually sought methods of looking to advance the entire structure of the business, thinking constantly about how to do so as a young man taking orders from the telephone station down to the pits.

Borrowing $5000 from his father in law shortly after graduating from college and finishing his compulsory army service, Mr Rosenthal bought a membership of the CBoT, which he was able to repay quite quickly, and had joined at exactly the right time that suited his avantgarde plans for leadership.

From runner to one of the most respected names in the business, his 61 years of experience made a clear impact because of his vision for where the industry needed to go:

According to the FIA, which used to stand for Futures Industry Association and now is known as FIA, an organization that refers to itself as the leading global trade organization for the futures, options and centrally cleared derivatives market, “Of all the brokerage firms that have sought to move the Chicago exchanges, few have had the influence of the Rosenthal Collins Group. Everyone who trades Treasury futures today owes Les Rosenthal a debt of gratitude, because he provided the essential leadership necessary to win the members’ approval to develop and launch the Ginnie Mae futures contract, the world’s first contract based on interest rates.”

Mr. Rosenthal recalls just how revolutionary and difficult it was for the industry to trust trading electronically.

It’s changed somewhat now that so much of the trading is happening on the screen. In the electronic marketplace, you don’t see the people eye to eye and you don’t know who you’re making your trade with, but integrity is still very important. But in the days that we’re talking about, integrity was very important, because you made a trade with a person across the pit, and sometimes it wasn’t anything more than a gesture” Leslie Rosenthal

You would nod your head or you’d flick your finger or you would do other acknowledging things. You’d have to make sure that the person that you were making that trade with showed up the next day, even when the trade might be against him, because if he didn’t, then you would be out of luck. There were very few instances that I can recall of anybody not showing up. Once in a while it happened, but most of the time the man who made the trade was as good as his word” said Mr Rosenthal.

As if that wasn’t enough, Mr. Rosenthal has many other titles and roles in the futures industry. Here’s an excerpt from RCG’s press release:

He was also Chairman of the Board of Trade Clearing Corporation.  He was a director of the Chicago Mercantile Exchange and MidAmerica Commodity Exchange and a founding member of the National Futures Association.

What an incredible legacy to leave for an industry that has experienced so much evolution. We can’t help but wonder what’s next for the industry and who will be the next Rosenthal to lead the industry into its bright future. We’ll leave it to a quote from Mr. Rosenthal himself to leave us all with a little inspiration as we move forward:

“Unless you do something to change with the times, you become non-existent” – Les Rosenthal

RIP

Article by RCM Alternatives