All of the madness this week dealing with Swiss Franc mayhem brought back my memories of the insane world of FX Trading. I chuckle when I hear ads on the radio talking about doing this from home to supplement your income. If the definition of supplement is losing all of your money, these ads are entirely accurate. I saw so many professionals get smoked in this business, the thought of Mom and Pop doing this on their tablets while watching American Idol is too laughable for words. FX trades 24/7 and has bouts of volatility that would make stock traders blush. It attracts some of the most insane people on this planet and provides enormous entertainment value, if looked at in the proper perspective. Here are a few stories from back in the day.
Our Chief Dealer or Head Trader, as they would say in the states, could have been a character on Saturday Night Live played by Michael Meyers as a financial Austin Powers. “Austin” (not his real name) looked like Phil Collins and wore lime green shirts with a white belt. His proper English accent made the craziness even more hilarious. I was his assistant. We traded for a Swiss bank and the Swiss dealer was number one on the totem pole. In many ways I was number two, in more definitions than one. When things went south, I would often get the blame. I figured out after a while that I had a lot more power than I realized. I would relay his messages and orders, which needed to be acted on immediately, if not sooner. I also became a mini Joe McCarthy, blaming those I did not like for the mishaps that often occurred sorting out our positions. Trading was often frenetic, and I had to “balance” all the numerous buys and sells while simultaneously helping him trade. The Corporate Desk became the target of my wrath. They were a large group of overpaid and pretentious people whose job it was to get us clients who we could over charge. We had few customers who actually helped us, so the prevailing thought was: What the hell do these people do all day? We were working our asses off in this violent world and they were not pulling their share. I had a solution, make them miserable! When positions did not balance they became my favorite scapegoat. When Austin would ask me if we “balanced,” I would often reply no. When he would ask why not, I would respond, “I don’t know but I think the Corporate Desk did not write all of their tickets.” I had no idea why we didn’t balance, but I needed some amusement in this hell hole. He would then stand up in his full Austin Powers attire, hands on his hips, and bellow in his British accent as sarcastic as humanely possible, “Corporate Desk, I know you are very BUSY, but will you please write your tickets.” The whole trading floor would pause and then the spectacle would begin of apologies, emasculating behavior and other fun stuff to watch. I miss those days.
FX trading was a great equalizer. It did not matter what school you came from or who your parents were, as long as you made money. Austin was a High School graduate. He often referenced this when us college grads would say stupid things, like asking about Jersey, one of the Channel islands in England, as if it was New Jersey. The bank thought it would be a great idea to hire Ivy league graduates as FX trainees. Some were fine, but others were unmitigated disasters. One in particular, a Brown graduate, took the cake. When Austin would ask if the person on the phone bought or sold (crucial information when a position is considered long term if it lasted for 5 minutes) his responses were classic. Many times he would just mumble something that only a Klingon would understand. Often he would get the price, and instead of alerting Austin with a hand signal on the nature of the transaction, he would blurt out in a panicked voice, “Where is the market?” This extra layer of uncertainty in a steaming cauldron of tension, which was a trading floor, would cause a flood of expletives to flow like a river. The search for what the counterparty did was often the highlight of my day. It culminated in the classic, “Grab the phone from that imbecile!” So much for his Brown education; Austin had made up his mind about Mr. Brown: he had a major in screw-up, with a minor in stupidity.
Some of the wildest scenes would occur when news came out and the “bandits”, as Austin referred to them, would begin their swarm. Since we were a huge Swiss Bank, the other traders would come to us for liquidity. They knew we would always quote them a price with a fair spread, no matter what as going on. One day in the midst of this chaos, Austin pulled out a chess board and asked if I wanted to play. Since that was a much better alternative than getting screamed at, I agreed. We played and he enjoyed beating me. I believe he defeated me over 200 times in a row. This would make him squeal in delight at my frustration. Since he was the King, nobody questioned him regarding this bizarre habit being consummated in the middle of hundreds of millions of dollars changing hands. I was happy he wasn’t screaming at me, he was happy humiliating me, and all was good; except when someone would ask him for a price in the middle of one our tournaments. He would respond with, “Can’t you see I am busy mate!” Sometimes I really loved that crazy place.
In the end I eventually left and so did everybody else, either voluntary or not. It was inevitable that most would get fired for a huge trading loss. It was just a matter of time until it was your turn. Unlike Mom and Pop amateur currency traders, there was often a six-figure position awaiting at another bank. We were trading with the bank’s capital, not our own! This was the most important lesson I learned from this experience. I cannot be more adamant, the best advice I can give about undertaking this venture is “Don’t Do It!!” At least I have some treasured memories, your nostalgia will not be as fond.