The End of An Era for Odd Lots

Tracy Alloway (0:11)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:15)

And I'm Joe Weisenthal.

Tracy Alloway (0:17)

Joe, the day has come.

Joe Weisenthal (0:22)

I know where you're going with this. I'm excited.

Tracy Alloway (0:25)

It's the, are you, are you? It's the end of Odd Lots, Odd Lots.

Joe Weisenthal (0:31)

Aw, wait, the end of Odd Lots, Odd Lots.

Tracy Alloway (0:35)

Or another way of looking at it is, it's the Odd Lots, Odd Lots. It's Odd Lots all the way down.

Joe Weisenthal (0:40)

But just before we freak everyone out, is Odd Lots coming to an end? I'm confused.

Tracy Alloway (0:45)

Hopefully not. No, okay.

This is not the end of the Odd Lots podcast as we know it. It is, however.

Joe Weisenthal (0:53)

I'm relieved.

Tracy Alloway (0:55)

Yes, it's good for both of us. It is, however, the episode in which we discuss the possible end of Odd Lots trading as we know it.

Joe Weisenthal (1:06)

Yeah, so this is something we've never really talked about, I don't think, which is where our name of the podcast comes from. I'm not sure if we've ever even really broached that, have we?

Tracy Alloway (1:17)

No, I think we just sort of threw it out there and started recording. But for those people that don't know, Odd Lots, it's basically a term that describes a order for stocks or bonds of an unusual size, basically. Often it's small orders of bonds or stocks, an Odd Lot.

Joe Weisenthal (1:37)

So it's like if you were to place an order for, I don't know, 937 shares of a company or something like that, something weird that's not the normal increment, that would be an Odd Lot.

Tracy Alloway (1:49)

Something irregular.

Joe Weisenthal (1:50)

Okay.

Tracy Alloway (1:50)

Yeah, exactly. And from what I remember, we chose the name, well, we were looking for something catchy, and I thought Odd Lots also sort of described the ethos of the podcast in the sense that we cover a lot of slightly random ground sometimes.

Joe Weisenthal (2:05)

Right, stories that don't typically quite fit perfectly into the overall market themes, because of course, stories that fit nicely into the overall market stories are covered in pretty nice depth anywhere. I'm thinking, you know, back to our old days of like studying, talking about the cattle market, for example, you know, it doesn't quite fit into the typical markets reporting.

Tracy Alloway (2:30)

No, there's not enough cattle market coverage, that's for sure.

Joe Weisenthal (2:32)

With the catfish bubble.

Tracy Alloway (2:34)

That's right.

But the reason we are actually finally talking about odd lots themselves is because there's been a little bit of news on this front a few weeks ago, Bloomberg actually reported that I think it was JP Morgan and Citigroup were shutting down their odd lots trading desks forever. So a big, big change for the odd lots market, so to speak.

Joe Weisenthal (2:57)

Right, so capital O odd lots is staying, but lower case O odd lots appear to be on their way out, or at least people are still going to be making purchases in random increments, but the idea of a specific desk devoted to them, those seem to be on the way out. And we want to know why.

Tracy Alloway (3:19)

Exactly, and we actually have the perfect guest to explain exactly what is happening. He's a recurring odd lots guest, formerly at Goldman Sachs, Mr. Chris White, now CEO at BondCliQ and Viable Markets.

Thank you so much for coming on again.

Chris White (3:35)

Well, it's my pleasure. I want to ask though, before we get started, am I the first three time odd lots guest?

Tracy Alloway (3:42)

I think you might be.

Joe Weisenthal (3:44)

Yeah, we've had a number of two time guests. I think you are the first three time guest.

Chris White (3:48)

Well, I was told by your producers that there would be something for me, so I'll be waiting after the show. I think it's called the Steve Martin Award.

Joe Weisenthal (3:56)

A special jacket maybe.

Chris White (3:58)

Exactly. Well, I'm thrilled to be here. I'm actually a true fan of the odd lots podcast. You've got a couple of my all time favorite podcasts in your catalog, particularly the one that you did with Andrew Lowe. I thought the Adaptive Markets podcast was awesome.

And then just so listening to the origin story of how you came up with the name was fascinating for me as a true fan.

But I'm happy to do what I think I've been brought in. I'm sort of the designated hitter when it comes to talking about innovation and credit.