Leo Melamed is a former chairman of the Chicago Mercantile Exchange (CME), current board member of CME Group and chairman of the CME Group Foundation.[1] He is a longtime executive in the field of global derivatives.
Melamed, an attorney by trade, was named chairman of the Chicago Mercantile Exchange in 1969. In 1972, the CME under his leadership launched currency futures and created the International Monetary Market (IMM). During his time as chairman, the CME introduced a number of financial instruments, including futures on US Treasury Bills and Eurodollars. In 1982, the CME introduced the first stock index futures.[2]
In 1991 he founded his own consulting firm, Melamed & Associates, of which he is chairman and chief executive officer. He formerly was a member of the global markets advisory committee of the U.S. Commodity Futures Trading Commission[3] and he previously served on the board of directors of OneChicago,[4] an exchange for single-stock futures.
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Melamed was born in Poland in 1932. The family name at the time was Melamdovich. In 1939, the Japanese consul general to Lithuania, Chiune Sugihara, issued his family a life-saving transit visa, and they made the long trek across Siberia to safe haven in Japan. They crossed the Pacific to the US in spring 1941 and the family settled in Chicago.[5]
In a 1998 interview with Derivatives Strategy magazine, Melamed said that he became involved in futures trading as an accident, "the hand of fate." Melamed said: "I was in law school looking for a law clerk job and answered a want ad. The firm in question, Merrill, Lynch, Pierce, Fenner & Bean, was looking for a 'runner' to work between the hours of 9:00 and 1:00, which was perfect for my class schedule. With that many names, how could this firm be anything but an established law firm looking for a clerk to run to court?" Throughout law school, he worked as a runner in the produce futures markets, learning about the business. He went on to work as a lawyer and became chairman of the exchange in 1967.[6]
In a speech in January 2005, Melamed traced the origin of his ideas about finance to his childhood wartime experiences.
In Tokyo in April 1941, he asked his father, Isaac Melamdovich, a mathematics teacher, to explain how the community of Jewish residents in that city had enough money to support the sudden influx of some 3,000 refugees such as themselves.
"Well, to understand that, my father explained, you have to understand the intricacies of the marketplace."
Specifically, the elder Melamdovich explained, "you must never trust the official rate of currency exchange announced by government." The real value was to be found in the black market, which exists anywhere—on any street or in any shop, where no government official is looking.
When a Jewish family in Japan received an exit visa in that period, it would deposit 5,000 yen in a bank and receive US dollars (or the currency of the country to which it planned to travel) at the official rate—say, US$50. That money was quickly and discreetly returned to the Refugee Committee where it was sold on the Black Market for the true exchange rate. The outgoing family received 5,000 yen back, and the Refugee Committee retained the profit to help new arrivals.[5]
Melamed has lectured and written extensively on the markets. His published works include: