He gulps 15 vitamin pills a day for fear his voice will fade. His vision is awry, his hearing is going and his wife has left him. His troubles have much to do with his work, but he would gladly suffer more if he could work more.
He is Ira Kuhlik, gold trader. For nine years he has matched wits, skill and endurance with the scores of other traders on the floor of the Commodity Exchange.
Each weekday morning at 9:30 a.m. the starting buzzer sounds. Kuhlik, always clad in a peach-colored, redpocketed jacket, stands tensely alert by the wooden rail that borders the "gold ring," the gold-trading area. Clusters of people mill around him, yelling, arms flapping.
Occasionally a shove is answered with a fist. Clerks outfitted in brightly colored coats dash between telephone banks and trading rings. Phones blare, curses fly. The din is earsplitting, the action bewildering. From an observation deck, the maroon-carpeted arena in the World Trade Center resembles a circus more than a center for international trade.
Yet the Commodity Exchange, or Comex, is the nation's largest marketplace for gold. It is one of a handful of centers around the world that set the metal's price daily. Lately the gold market has been highly active; the price has been skyrocketing, setting records almost every day. Ira Kuhlik couldn't be happier. "The busier it is, the more panicked the rest of the world, the better it is for me," he says.
Silver and copper also are traded on the Comex, but Kuhlik concentrates on gold. Like the other traders, he barters futures contracts -- commitments to receive or deliver a specified amount of a commodity in a specified month at a specified price.
Kuhlik is a market maker, a "Local" in commodities parlance. Locals ride price trends for short periods, then jump off and take profits -- or maybe losses. They often are ready to buy when everyone else is selling, or sell when everyone else is buying. They thus add liquidity to futures markets. If it weren't for people like Kuhlik, the analysts say, prices of gold and other commodities would swing even more violently than they do.
Locals make up about one-third of the 200 Comex members with floor-trading privileges, and they trade only for themselves. Outside customers' orders are handled by the other members, known as floor brokers. All 200 have an edge over outsiders just by being there.
"A local does the best when everybody else may be losing their shirts," Kuhlik says. That's because locals make most of their money during extreme price swings. When the little guy from Kansas buys gold at $380 an ounce and the price drops $20 in two days, he is likely to scramble out of the market at a loss; even if the price recovers, it is too late for him because he is out of the market. But the local who bought at $360 is still there and can catch his profit as the price goes back up.
Times of extreme price swings are times of high volume, so heavy business days are good ones for locals. But when business is slow, Kuhlik says, "it's terrifying."
Lately, business on the Comex has been anything but slow. Through August, more than four million gold contracts worth about $120 billion have been traded there this year, 128% more than in the like period last year. The price of a seat on the exchange has more than doubled since last year to $175,000 at the latest sale.
Gold transactions account for just part of the booming $1.6 trillion-a-year futures market in the U.S., a business involving not only precious metals but also more mundane commodities such as soybeans, plywood and orange juice. All told, there are 11 futures exchanges in the U.S. On all of them, contracts are bargained for auctionstyle, by means of open and vociferous outcry.
Commodity trading in other nations is a much more sedate affair. In London, for example, gold's price is set each day by five longtime bullion dealers who discuss the matter in private. On the floor of the Comex, it works like this: "Then I shout a bid across the ring and it's taken, that price is placed on ticker tapes around the world," says Lowell Mintz, Comex chairman and veteran floor trader. "For that second, that is the price of gold."
Who are the floor traders" Traditionally they have been the sons, nephews, brothers or cousins of somebody in the business. They apprenticed as messenger boys or clerks. Some acquired college and graduate degrees; other never completed high school.
But the futures explosion of recent years has lured a new breed of trader to the floor. Now former lawyers, accountants, engineers and doctors can be found jostling and hollering with the best of them. Mintz, whose father was a member of the Comex, can be found trading alongside Dr. Jarecki, a medical doctor, or Ilan Kreitner, a former Adelphi University economics professor. Women also have joined the fray, but not on the floor of the Comex.
Kuhlik is an ex-engineer. Intrigued by the commodities chapter in Morton Shulman's "Anyone Can Make a Million," a widely read investment guide in the 1960s, he began placing orders through a broker. By 1970 his brokerage fees were piling up and his passion was growning. He decided to eliminate the middleman and bought himself a Comex seat for $13,500. Eventually shedding his successful profession of 25 years, his wife of 17 years, three children, two cars and a house in Queens, he left for Manhattan and the exchange.
Why? Kuhlik agonizes over that question in weekly three-hour sessions with his psychiatrist. It's partly the thrill of the game, he thinks. But even more, he says earnestly, it is the "need to feel I have control." No wonder, then, that Kuhlik joined the fiercely independent locals.
"Local" isn't another way of saying small-time. One recent day, Kuhlik bought and sold 1,500 "lots," or 100-ounce contracts, of gold worth about $50 million. By day's end he was left with a net short position, or commitment to deliver, 30 lots or about $900,000 worth of gold. Of course, he doesn't actually deliver or receive any metal; he just trades and trades.
The graying Kuhlik is unusually candid about most things, but he would rather not discuss his age (about 50) or his income. He admits to having made and lost more than $100,000 in a day but hints that his average is well below that, somewhere in the five figures. "Let's just say I've never been wiped out," he says with a laugh. "I make a lot of money, I lose a lot of money." FORTUNES AND WIPEOUTS
Large annual incomes aren't unusual among floor traders. "Six figures annually? No sweat," says one industry veteran. "And sometimes much, much more." But total wipeouts aren't uncommon. Only 5 7/8 of a contract's value must be deposited to play the game (nothing at all for trades made and unmade the same day, but if the market moves the wrong way, additional funds must be put up immediately. In volatile markets it doesn't take long for a trader to run through the entire $50,000 that the Comex requires him to keep in his exchange account.
At the beginning, Kuhlik nearly scraped bottom. He didn't lose his exchange seat, but he did lose his wife, Eileen. The former Mrs. Kuhlik says, "How would you like losing your shirt? One day you're rich, the next day you're poor. It's hard to take. I couldn't see signing myself over to the commodities markets."
Kuhlik's lanky frame has become a fixture at the gold ring. "Ira's always trading. He's there all the time," a fellow trader says. Kuhlik's mouth is in constant motion: chewing gum, calling out bids, cursing. His mouth is expensive. The exchange has fined him hundreds of dollars for swearing and, until he quit four years ago, for smoking.
But he is very good at his job, colleagues say. "He has an uncanny feel for the market," one adversary says, "He is a substantial trader. He can't be ignored." ONE MISSED DAY
He has missed only one trading day -- to extend a recent trip to Las Vegas, he says with some embarrassment. The trip's purpose was to patch a quarrel with a woman friend, insists the gold trader, who says he doesn't like to gamble. "That stuff is for suckers," he says.
Staying with Kuhlik while he trades is grueling. Other traders may wander to a nearby lounge when the market lags; Kuhlik never strays. To help accomplish this, he drinks carefully measured glasses of orange juice and milk for breakfast, then abstains from food or drink until the 2:30 p.m. ending buzzer. "If I go to the bathroom, I can lose a lot of money," he says. "They wait for me to leave the ring."
It is 2 p.m. and the market is moving. Numbers on a wall scoreboard keep flipping as new bids meet offers. A video screen in the gold ring's center keeps track of changing values in Swiss francs, West German marks and soybeans because their price movements can affect the price of gold. Kuhlik watches both the scoreboard and the video screen through separate contact-lens prescriptions. Strange as it seems, he swears that one eye has gone nearsighted from monitoring the far-off scoreboard and the other has gone farsighted from watching the video screen.
Pandemonium builds. A rumor of Arab gold-buying filters among the traders. A newswire reports that fighting in Iran has intensified. Here news is distilled to its essence: bullish or bearish. This news is bullish and the crowd is excited.
Traders clamor for attention as prices rise. When shouts don't work, a chorus of claps, whistles and creative gestures is added. Everyone wants the price that flashed on the board last. "Deece 70 bid," a broker screams, waving repeatedly. He is offering to buy gold contracts -- he didn't specify how many -- for delivery in December at $390.70 an ounce. The board at the moment registers $390.50. "All right," screams Kuhlik, who had earlier bought December delivery contracts cheaper. NO CHARTS OR NEWSPAPERS
Each man jots down the other's initials on a scrap of paper. Neither had specified how many contracts were changing hands. Kuhlik inferred from the repeated waving that the other trader wanted "a lot of contracts." He never knows until he tallies his paper scraps at day's end and talks things over with the other traders how many contracts he has bought or sold.
Kuhlik used to think that his engineering background would help. He calculated supply and demand and worked out what he figured were superior charts. But he soon discovered that "very often the market ignores fundamentals; my hard work and calculations lost me money."
He avoids newspapers. The news, he says, "is dangerous for a local." Once the public learns of something and orders start spilling onto the floor, it's too late for the locals, who prosper by being there first. "Often," Kuhlik observes, "you have no other basis than intuition for what you're doing."
But Kuhlik has his methods. He claims to have read every book published on commodities trading. Each night he prepares for an hour for the next day's trading -- he won't say how. And he has taken voice lessions to learn "how to yell loud without getting laryngitis."
His other devices are less scientific. While trading he wears red undershorts, red socks and a redstreaked tie. His jacket, remember, has red pockets. A seer once told him that red brings luck to those born under the sign of Scorpio.
"In this business," Kuhlik says, "you need all the luck you can get.