Invincible Summer (14 page)

U
SE THE
F
RENCH
clients,' advised Big Paul as he and Eva walked onto the trading floor the following morning. ‘They're all cunts and it's not like we have much of a reputation to protect in France anyway.'

‘But I'll never get close to the size I need from clients,' she told him as they made their way towards their section along an aisle of desks bordered by banks of blinking screens. ‘I need nine hundred million bonds. That's huge, half a normal day's trading volume in BTPs. I've got no choice but to do most of it in the market.'

‘You've got a point. Okay, here's what you do. Buy a third in the market over the course of the day, then use another third to ramp the price higher in the last hour before close, then go home short the final third and buy it back tomorrow when the market corrects what will in reality be a move based on no new information.'

‘Isn't that, you know, a bit of a regulatory no-no? Market ramping?'

‘Well, if you wanted to be really pernickety about it you could call it price manipulation or front-running client orders, but it's basically a grey area. Everyone does it. What are we going to do, just not make money? Because some other fucker will do it if you don't.' Big Paul shrugged. ‘Anyway, it's your show. Just telling you how I'd play it.'

Eva pondered his words as she reached her desk and placed her coffee down on it, sending ribbons of steam swirling upwards in front of her six screens. He was really just echoing what she already knew. It was going to be hairy, but there was no other way to do it without risking getting her face ripped off in the market when the other banks got wind of the size she needed. She would have to start off quietly, taking care not to move the market too much, and then use her buying power to really push the price up towards the end of the day and fill the client orders at the higher closing price. She opened up her pricing spreadsheet and tweaked a few parameters, then watched with widening eyes as a cascade of calculations flowed across the cells. The numbers involved were not small. This was going to need a very steady hand, but she might just make a killing.

Things started well enough, with Italian government bonds opening up on the previous day's closing price without her having to buy a single one, giving her the feeling that the natural tendency of the market was to drift gently higher over the course of the day. With a bit of luck that meant she wouldn't encounter too much resistance when she went in all-guns-blazing to really push the price up towards the close. It would revert, of course; the more something goes up in a day, the more likely that it will correct and come back down the next day, when she could buy the rest of the BTPs she needed at a lower price. She took a deep breath, and opened up a line to her broker to buy the first ten million bonds.

‘Graham. 95.00 bid in 10.'

‘Working that,' came her broker's voice down the line.

She waited for him to come back to her, expecting there to be at least a few sellers taking profit on the overnight move, but there was nothing. Seconds and then minutes slid by before Graham came back on the line suddenly, his voice an octave higher than usual.

‘95.20 lifted, 95.20 to 95.40 on the follow.'

That was unexpected, another buyer out there. Eva experienced a tingle of unease. She hadn't expected to have to raise her bid by thirty cents just to get into the game. Something felt…off. There was no choice but to buy the bonds, of course, but it was all a question of timing. The trick was learning when to listen to your instincts. Over the years she had gained a feel for how markets behave, observing the processes that went on within herself as she traded, the ebb and flow of fear and greed, elation and panic, and then generalising outwards to all the other traders just like herself that in aggregate made up the market, all of them subject to the same basic motivations.

‘Okay, I'm thirty bid, Graham,' she told her broker.

‘Working…' came the broker's disembodied voice down the line. This time it was much quicker. ‘Forty lifted, bid over there, seventy offer on the follow.'

‘95.70 offer?' she muttered disbelievingly. The market was running away from her.She lifted the offer through clenched teeth. ‘Mine at seventy, Graham, I take thirty million.'

On a normal day she'd have a sense of which way the ocean of trades was flowing, as if she were a grain of sand swept around by the tide, but with at least a feeling for the magnitude and direction of each force acting upon her. And on her best days of trading she would lose herself in the flow of numbers completely, nudging and shaping them according to her wishes. But today she was feeling like there were things going on beneath the surface that she could feel but couldn't see, leaving her unable even to call which direction things were headed.

Over the remainder of the morning things only got worse. Someone out there had started dumping bonds like they were toxic waste and by lunchtime Eva was long three hundred million bonds, the market was down to 94.30, and her trading book's profit was down well over four million euros. Since her entire trading desk had made fifteen million over the whole year-to-date, at best she would look like a complete idiot and at worst would wipe out the entire team's annual bonuses in a single morning. A day like this could make or break a career and Eva had the uncomfortable sensation of all the years she'd toiled clinging to her back, all of the slog and fourteen-hour days worth nothing without the combination of luck and ruthlessness you needed to stay afloat on a day like this.
Get a grip, get a grip
, she muttered to herself.

From her seat she spotted Brad Whitman, the recently appointed Head of Fixed Income, wander out of his office and begin one of his strolls across the trading floor. He was an American poached from Morgan Stanley, and like all new appointees he was looking to make his mark and justify the multi-million dollar golden handshake he'd almost certainly been given to join. That would be achieved through downward pressure, in the form of the tantalising carrot of big bonuses and the stamp of approval, of being in the club, coupled with the stick of being seen as a failure if you didn't make money, with the invisible yet potently stigmatising mark of a tiny bonus. She suspected Whitman would be successful; something of a personality cult had already sprung up around him, with even normally cool-headed traders namedropping him in conversation: ‘So Brad was just saying to me the other day….'

He was a smoothly handsome man but there was something disconcerting about him, exacerbated by the fact that his eyes pointed in slightly different directions making it difficult to know whether you had his attention when you spoke to him. Not that Eva had much call to speak to him anyway; she was too junior to deal with him on a day-to-day basis, and on a day like this, that was a blessing. She hunkered down behind her screens, waiting for him to pass. He was heading in her direction, though, stopping to exchange a few words here and there with the Sales desk then the Gilts team, before halting abruptly beside her desk.

‘What's happening in BTPs?'

She looked around for Big Paul or Robert, but their desks were empty; it was definitely her he was talking to.

‘Well, they opened fifteen basis points up on the back of the ECB announcement,' she told him.

He nodded. ‘Feels like something's happening in the market. Ten-year Italy's as expensive as I've seen it in what, four years? Haven't you guys got a big order today?'

‘Yeah. Nine hundred million. I'm in the market for the first six hundred before today's close.'

He leant down with an arm on her desk, close enough to engulf her in a cloud of expensive aftershave, and read from her screen over her shoulder. ‘94.10 to 94.60. Where are we long?'

‘A bit higher than that, but it's all under control. I'm just letting the market settle here before bringing out the big guns,' she lied.

He stood silently looking at her, or perhaps at something in the distance beyond her shoulder. Had he not heard her? Was something else expected?

‘Should make a big number on this,' she continued, hearing the words fly out of her own mouth without meaning them to. What the fuck had she said that for? Did she have some form of impress-the-management Tourette's? God, she was pathetic, as pathetic as the Brad-cultists.

‘Make sure you don't end up the wrong way on this, Evelyn.' He smiled broadly and vacantly in her direction, already beginning to glide away. ‘Year-end cut off is tomorrow, and it's touch and go as to whether we make budget. We need everything we can get.'

Eva slumped in her seat, half relieved at the conversation being over and half in despair at not having owned up to her losses, and worse, making it sound like she was going to make money. Still, she reasoned, she couldn't really make the situation much worse anyway. If she lost another half a million she'd have reached her stop-loss and she'd have to ring Market Risk and own up, and would be effectively barred from trading. Game over. You did occasionally hear of traders getting stopped out and then having their losses cleared and their trading book reset to zero but for that to happen you'd have to have friends in high places, which was in no way an accurate description of her own situation.

A broker was walking across the floor handing out takeaway food and she grabbed a couple of bags of greasy thick-cut chips, wolfing them down at her desk without taking her eyes off her screens. They sank to her stomach like boulders and stayed there, refusing to digest.

‘How's it going?' asked Big Paul, arriving back from a meeting.

‘I'm a bit underwater on those BTPs at the moment,' she mumbled, thinking that even if she was going down, she'd be damned if she was going to let him see how nervous she was.

He looked at the numbers on the screen and then back at her pale face and laughed. ‘Just a bit, eh? Look at you, you're bricking it. This is all going to be fine, I'm telling you. You just have to hold your nerve.'

‘Easy for you to say. Whitman's been walking the floor and I was the only one here. He asked about the BTPs and basically told me I better make him some money today. On the upside he called me Evelyn—he can't fire me if he doesn't actually know who I am, right?'

Big Paul smiled. ‘Oh, don't worry about that, it's just how he keeps people on their toes. Graces you with some unexpected attention and then menaces you with his expectations. I worked under him at Goldman back in the day. He knows fuck all about markets, but he's supremely good at making people scared enough they'll do anything to make money for him. You notice how his eyes point in different directions? The rumour used to be that he'd had an operation to do that on purpose, the better to freak people out when he talks to them. You're never quite sure whether you've got his attention and then he pounces on you like a shark.' His voice was admiring. ‘Has he done that other thing to you yet, where he makes a comment and then just stands there without saying a word until you start gabbling to fill the silence? God, it's effective. I've seen him break people with that in meetings. They end up telling him whatever they think he wants to hear, and then it's on them to go away and make it happen.'

‘I'm still trying to picture a shark pouncing,' said Eva, to avoid admitting that that was exactly what had just happened to her.

‘Like a fucking Great Crested Pouncing Shark, I'm telling you. Anyway. It's what, one-thirty now, so two and a half hours till close. Try not to get stopped out or lose our bonuses, eh.'

It was still a bit early to be trying to really work the market but Eva thought she might actually scream if she had to sit there fidgeting any longer, so she opened up the line to her broker.

‘Put a forty bid in, Graham.'

Her bid appeared on the screen and she waited, expecting the seller from earlier to hit her out of sight. The seconds stretched out, warping and elongating in the air around her. She slumped in her chair with a clammy sense of inevitability, growing so resigned to her fate that she had to blink and double-check when suddenly the sixty offer disappeared from her screen. That was unexpected; could the market actually be shifting back in her direction or was it just a blip? A few trades and ten minutes later, the offer was back up to 95.10. Was it actually possible that the sellers were finally getting scared off?

All day the momentum had been against her, and momentum was almost impossible to reverse. But now it felt as though something was weakening, slackening. Was it really possible that this could turn from a career-ending day of humiliation and failure to a triumph? The sheer range of possible outcomes and their implications for her future seemed unfathomably vast as she sat balanced at what might just be a point of inflection. Things could still go either way. Eva felt a strange calm descend upon her. She opened up a line and began to trade.

‘There look, you're nearly back to flat,' came Big Paul's voice from behind her some time later, sweeping her attention out of the screens of flickering numbers that she had been entirely immersed, and she realised that he was right, she'd forced the market back to a level at which her losses had almost completely evaporated. Her surroundings swung back into focus and she realised that he'd been doing nothing but sitting at his desk watching the BTP market move as she traded.

‘Damn right,' she told him. ‘Watch this. If we can just get back up to ninety six, we'll be in business.'

It was three o'clock now, with just one hour to go before the market closed. Over the last few minutes two of the higher offer prices had disappeared from her screen, which could mean that people were finishing up for the day, or just that they wanted her to think that they were. Still, if there were ever a time to strike it was now. Eva kept buying steadily until she had about two thirds of the six hundred million bonds she wanted that day and there were just twenty minutes to go. The sellers were pulling back and she could see the path to the finish line opening up in front of her. The best offer was now ninety-seven, allowing her to exhale.