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CBOE Origin Remembrances: Joe Doherty

By Lawrence G. McMillan

I would highly encourage anyone who is going to read this article of Joe Doherty’s recollections, to first read the article by Joe Sullivan. Joe Doherty was extremely instrumental in the creation of the CBOE, for he worked right along with Joe Sullivan as the process inched forward for four years before the exchange was born. These are some recollections that Joe D has of those years and the ones that immediately followed.

After re-reading Joe Sullivan’s paper about the 4-year gestation period of the CBOE, I was reminded what an excellent writer he was and how completely he had covered the CBOE’s formative years. So, what I am going to add are just a few personal recollections from that time period. I will, at times, refer back to what Joe has said.

After college and graduate business school, I was completing an Army hitch. A couple of Army buddies and I had dabbled in commodity futures trading. This whet my appetite for doing something in the financial world. In the spring of 1969, I read in the Wall Street Journal that the Chicago Board of Trade (CBT) was investigating getting into options. I had little understanding what this meant, but I decided it sounded like it might be fun as something with which to try to get involved after my army days ended.

I struggled with how to sell myself, but after enough bourbon I finally produced a letter I sent off to the President of the CBT, which I imagined to be some huge monolith of an organization. In fact, the CBT organization was more like a large 4-H club, as that had been the source of many of its presidents. But it was in the process of a significant change of focus, and had a new President experienced in the ways of Washington politics. He passed my letter on to his speech writer and head of research – Joe Sullivan. To my surprise, Joe called me and invited me to Chicago for an interview. To my even greater surprise and delight, Joe subsequently offered me an ill-defined job working with him to explore getting options trading going at the CBT.

I was the second hire by Joe Sullivan (Barbara Kaplan was the first) and started in July of 1969. At that early date, the thought, reflected in a PERT chart, was that it would take about six months to get everything in place for trading to begin. We severely underestimated the magnitude of the project, especially the regulatory requirements that would have to be addressed. For more than three years, the PERT chart never changed – we were always still six months from launch.

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