Release Date: May 11, 2005

Monmouth College students of visiting instructor Lee Celske participate in a mock trading session in the pit at the Chicago Board of Options Exchange.

MONMOUTH, Ill. — Monmouth College visiting lecturer Lee Celske has gotten a lot of press lately for the winds of change that are blowing through Aledo following his recent election as mayor of that western Illinois city.

A former options trader, Celske brings a passion and zeal to whatever task he takes on, including sharing his considerable expertise with undergraduate business students.

Recently, Celske took 31 Monmouth students to three major business venues in Chicago on a field trip for his “Futures and Options” class. The group visited the Chicago Board of Trade, the Federal Reserve Bank and the Chicago Board of Options Exchange (CBOE). Through connections Celske made in 11 years at the latter site, the students were able to take part in a “Trade Like the Pros” session. Celske said that Monmouth is the only college he knows of whose students have had such an opportunity.

“We were very, very, very privileged to be able to do this,” he said. “I have some dear friends from my time with the CBOE, and they allowed us to do this.”

A grant from the Mellinger Foundation of Monmouth helped finance the trip.

“We were very lucky to have Lee Celske, with his experience with options, take us on this trip and give us firsthand experience,” said Todd French, a senior from Sandwich. “Without his contacts in this field, there would be a slim chance that we would have had the opportunity to experience this in our lifetime.”

For at least one student, sophomore Audrey Bellefeuille of Highwood, the first stop alone could have been a day-long experience all to itself.

“Starting on the bus, I was excited knowing that I would get to see jobs that I could possibly make a career out of,” she said. “At the Federal Reserve Bank, anything one would want to know about the history of money was there. Our guide told us things that boggled my mind, and then he told us some more, hardly stopping to take a breath. I never knew there was so much to know about money; it is fascinating. I could have stayed there all day.”

Next up was a trip to the Chicago Board of Trade, where the students learned about commodities trading. Then came the capstone experience, as students were briefed on the history of the CBOE and given pointers on such things as how to write up orders, what the various hand signals mean and how the four large information screens were set up.

Once the real traders left the floor at 3:15 p.m., Celske’s group helped complement the size of an Options Institute session. The institute’s graduation ceremony involves its participants getting in the pit and taking part in a mock trading session.

On a normal day, there are 500-600 different contracts, with 800 traders. The Monmouth students and institute group totaled 80 people, and they were involved with the “calls and puts” of only 12 contracts for a fictitious stock called “IBN.”

Celske implored his group to dive right in, knowing that the experience would pass quickly and they would want to get the most out of it. Still, he said, “They were wide-eyed and quiet at first, and they didn’t know what to say. You’ve got to learn to scream and yell to be a trader.”

In fact, in his early days with the CBOE, Celske said he even practiced screaming in front of a mirror in the basement of his home.

“It took a while to get comfortable knowing what you were going to scream and just how loud you had to be,” said Dan McCarthy, a sophomore from Westchester. “The pit was nothing but adrenaline and characters … The trading coaches were so helpful by getting us into a groove and helping us feel comfortable out there.”

“While in the pit, everyone was tentative to start the bids because there was a little confusion as to how to make the correct bid,” said French. “But once everything sank in, then the pit started getting crazy.”

“It was extremely fast-paced and constantly changing,” said Bellefeuille. “I couldn’t keep up with what was going on, and when I finally figured it out, something changed, or the sellers were on to the next thing already. I stood in the pit like a kid in a candy store, jaw dropped and eyes wide.”

“The kids will never learn this from a textbook,” Celske said. “Every price increment needs to be traded, so there is constant action. It’s a lot like the old cartoon where the sheepdog and the wolf exchange greetings as they clock into work. Then they beat each other up, and at the end of the day, they clock out. You get to learn more about some of the other traders than their spouses know, but when it comes right down to it, you want to take his money and he wants to take yours. That makes it uncomfortable for a lot of people. This game is tough, and the only way to learn it is in the pits.”

Not only is it tough mentally, as trading is conducted daily from 8:30 a.m. to 3:15 p.m. and fortunes can be won or lost with a split-second decision at any point in between, but it is also tough physically.

“It was not uncommon to line up outside to get a good spot as early as 6 a.m., and once you get that spot, you’re not going to want to leave it, because there’s no way you’ll get it back,” he said. “So if you think about it, that means no bathroom breaks. Our kids were all sweated up after only 50 minutes of trading in a room that only had 80 people instead of the normal 800. It’s a rough business, and it has a very high turnover rate.”

Celske commented that the job is particularly tough on women, but at least one MC student bucked the trend in her short stint on the floor.

“I learned a lot from Jack Smith, the professional trader standing next to me,” said Karissa Ulanski, a senior from Chicago. “He explained to a group of us that we needed a ‘spread’ to come out even. Relating what I learned in class, I was able to understand the point he was trying to get across. In the end, I had four spreads, and if the puts and calls I traded were actually real, I would have made $200.”

Another reason that trading is not for everybody is the amount of overhead required. A substantial amount of money is needed to open up a trading account. Through renting a membership and paying trading fees, a trader’s costs could easily be about $25,000 each month.

“And guess what happens when you have a bad month,” Celske said.

Following his 11 years at the CBOE, Celske and his family lived in London for eight years. He worked at the London Stock Exchange and was also employed at the trading desk of a large Canadian bank. He has been back in the U.S. for five years, and he and his wife picked Aledo as a place to settle because of the education opportunities it afforded his children, one of whom has special needs.

“I have a passion for the trading business,” Celske concluded. “I was very fortunate to end up where I did. That’s one of the great things about America. I got no special treatment, and I made my own breaks. I was at the right stage of my life, at the right age and in the right place.”

For the 31 Monmouth student participants it may also have been a case of being in the right time and place. Because of Celske’s professional commitments, it is uncertain whether the part-time instructor will be available to return to the classroom in the fall.

“Calling it the ‘trip of a lifetime’ hardly does it justice,” said Bellefeuille. “I have got to be one of the luckiest kids in the world. I was one of the few people that will ever get to participate in or see any of the ‘pit-action,’ as I’m sure that it will soon be obsolete with the advancement of technology. In short, the trip surpassed any expectation that I had for it. It was amazing.”

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