One day, I pointed out something for Orange to take a look at before the end of the trading day. A couple of minutes later he called me into his office, and for once it wasn’t a bad thing. He congratulated me on how well I was doing, and assured me that, in addition to him, all of the other big shots in the firm had noticed as well and were completely reappraising my value.
Wow. I pointed out Brown’s insistence that I wasn’t good enough to be trading one of the firm’s larger accounts, but Orange laughed it off and assured me that he was convinced that I was a great trader and that all the mess of the past had been an unfortunate mistake that would soon be completely forgotten. He assured me that he was convinced that I’d finally turned the corner with the firm and was well on my way to success.
To show his faith in me he raised my capital to five million dollars and told me I had carte blanche, I could trade any name in the entire equity universe. I was completely taken aback. Four months ago it seemed inconceivable that things could become so good for me. For the first time in over a year, I was again completely excited about my job.
We then went on to have a lengthy conversation about the firm as a whole. I mentioned that a lot of ACME9’s senior traders had left after bonuses were given out and that I’d be willing to take up as much of the slack as I could.
This exodus of traders was nothing new for ACME9, traders leaving seconds after their bonuses were rewarded was such a common phenomenon in the industry that bonus day was referred to as “X dividend day,” which was a reference to how calls are exercised the day after a stock pays its dividend. Essentially, if a person thinks that they aren’t making enough money they would stick around long enough to collect their bonus, which could be two to three times their salary and then hit the road for better pastures sometimes as quickly as a week later. (They’d then have to wait six months for the non-compete contract that ACME9 made us sign to expire before they could trade again.)
The truth is that ACME9 had no respect for traders. Indeed they really did consider them little more than fry cooks. As far as they were concerned, they could stick any reasonably smart person with a little training behind their computers and expect to make money. In a way, as long as the market continued to act relatively calm they were correct. Unfortunately, there was a huge wave coming and their sapped resources and diminished risk management were about to slap them in the face.
Orange pointed out that I seemed relatively pessimistic about the industry. Perhaps this was true for two reasons:
1. Orange was so optimistic he would have made Pollyanna seem like a downer. He was convinced that huge riches were out there for the taking, and was ready to get in there, trade big size, and bring home that money. This was actually a refreshing attitude for me. Who knew, maybe he’d drag me into prosperity and wealth?
2. I told Orange that I’d been around for a long time, and that I’d seen rapid expansions similar to the one ACME9 was going through. I’d also seen the fall out when that expansion hit a road bump. When firms aren’t making money, or even worse losing money, the whole business can become a game of let’s blame someone else. God help you, if you work at a place whose business plan expects to make ever increasing amounts of money when profits hit the wall. Orange laughed off my concerns and assured me that we’d have a great time making money together.
One of the guy’s who had left the firm had been Orange’s right hand man. Ideally, that person would have become me, but Orange told me that he was bringing Floyd over to fill that spot. I mentioned that although Floyd was a good trader, I considered him to be a huge shooter. He’d see something that looked out of line and he’d continue to build up a massive position without much thought as to why the options were so out of line. Orange admitted that Floyd was a shooter, but he smiled and said that it was a quality he admired. Orange played in the big game and hopefully I was going there with him.
I Fought ACME9 and ACME9 Won: Part 12 Unreasonable Expections
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