The Coolest Guy in the RoomQ: Tell us a little bit about that, what did you do? Did you
join a firm, and what was that like? What was your experience just
walking in that first day?
A: We were real fortunate here in Minneapolis to have a firm
called NBX Trading, and they catered to and specialized in day
traders. So we used the firm’s hardware and traded strictly for
commissions.
Q: What were the commissions like for you in stocks?
A: They were three cents—per side.
Q: So it cost you more than a nickel to just get in and out of a
stock?
A: Yes.
Q: This was before decimalization, so you were still trading in
sixteenths and eighths and quarters, right?
A: Yes. It was interesting. I was looking forward to decimalization,
but it really ruined the markets for day trading stock.
Q: Because it narrowed the bid-ask spread and made the markets
very, very thick? [Authors’ note:Decimalization greatly reduced
the difference between bid and ask by reducing the spread to
sometimes just a penny. Therefore, a trader who bought on the
bid and sold on the ask saw his profit margins squeezed by more
than 90%, from 12.5 cents (1/8thof a dollar) to just 1 cent.]
A: Exactly.