Robert Harris - The Fear Index

She picked up the box and carried it out into the passageway as if it were an offering. On the handles of the doors leading off the corridor, and on the wooden panels, were traces of bluish-white powder where the surfaces had been dusted for fingerprints. In the hall, the blood had been cleaned off the floor. The surface was still damp, showing where Alex had been lying when she discovered him. She carefully skirted the spot. A noise came from inside the study and she felt her skin rise into gooseflesh just as a man’s heavy shape loomed in the doorway. She gave a cry of alarm and almost dropped the box.

She recognised him. It was the security expert, Genoud. He had shown her how to use the alarm system when they first moved in. Another man was with him – heavyset, like a wrestler.

‘Madame Hoffmann, forgive us if we startled you.’ Genoud had a grave professional manner. He introduced the other man. ‘Camille has been sent by your husband to look after you for the rest of the day.’

‘I don’t need looking after…’ began Gabrielle. But she was too shaken to put up much resistance, and found herself allowing the bodyguard to take the box from her hands and carry it out to the waiting Mercedes. She protested that at least she wanted to drive herself to the gallery in her own car. But Genoud was insistent that it was not safe – not until the man who had attacked her husband had been caught – and such was his blunt professional inflexibility that eventually she surrendered again and did as she was told.

‘Bloody brilliant,’ whispered Quarry, catching Hoffmann by the elbow as they left the boardroom.

‘You think? I got the feeling I’d lost them at one point.’

‘They don’t mind being lost, as long as you bring them back eventually to what they really want to see, which is the bottom line. And everyone loves a bit of Greek philosophy.’ He steered Hoffmann ahead of him. ‘My God, old Ezra’s an ugly bugger, but I could give him a kiss for that bit of mental arithmetic at the end.’

The clients were waiting patiently on the edge of the trading floor, all except for young Herxheimer and the Pole, Lukasinski, who had their backs to the others and were talking with quiet animation into their cell phones. Quarry exchanged a look with Hoffmann. Hoffmann shrugged. Even if they were breaking the terms of the non-disclosure agreement, there was not much that could be done. NDAs were bitches to enforce without evidence of breach, by which point it was too late in any case.

‘This way, if you please,’ called Quarry, and with his finger held aloft, tour-guide-style, he led them in a crocodile across the big room. Herxheimer and Lukasinski quickly ended their calls and rejoined the group. Elmira Gulzhan, wearing a large pair of sunglasses, automatically assumed the head of the queue. Clarisse Mussard, in her cardigan and baggy pants, shuffled along in her wake, looking like her maid. Instinctively Hoffmann glanced up at the CNBC ticker to see what was happening on the European markets. The week-long slide seemed to have stopped at last; the FTSE 100 was up by nearly half of one per cent.

They gathered round a trading screen in Execution. One of the quants vacated his desk to give them a better view.

‘So, this is VIXAL-4 in operation,’ said Hoffmann. He stood back to let the investors get closer to the terminal. He decided not to sit: that would have allowed them to see the wound on his scalp. ‘The algorithm selects the trades. They’re on the left of the screen in the pending orders file. On the right are the executed orders.’ He moved a little nearer so that he could read the figures. ‘Here, for instance,’ he began, ‘we have…’ He paused, surprised by the size of the trade; for a moment he thought the decimal point was in the wrong place. ‘Here you see we have one and a half million options to sell Accenture at fifty-two dollars a share.’

‘Whoa,’ said Easterbrook. ‘That’s a heck of a bet on the short side. Do you guys know something about Accenture we don’t?’

‘Fiscal Q2 profits down three per cent,’ rattled off Klein from memory, ‘earnings sixty cents a share: not great, but I don’t get the logic of that position.’

Quarry said, ‘Well, there must be some logic to it, otherwise VIXAL wouldn’t have taken the options. Why don’t you show them another trade, Alex?’

Hoffmann changed the screen. ‘Okay. Here – you see? – here’s another short we’ve just put on this morning: twelve and a half million options to sell Vista Airways at seven euros twenty-eight a share.’

Vista Airways was a low-cost, high-volume European airline, which none of those present would have dreamed of being seen dead on.

‘ Twelve and a half million? ’ repeated Easterbrook. ‘That must be a heck of a chunk of the market. Your machine has got some balls, I’ll give it that.’

‘Really, Bill,’ said Quarry, ‘is it that risky? All airline stocks are fragile these days. I’m perfectly easy with that position.’ But he sounded defensive, and Hoffmann guessed he must have noticed that the European markets were up: if a technical recovery spread across the Atlantic, they might be caught by a rising tide and end up having to sell the options at a loss.

Klein said, ‘Vista Airways had twelve per cent passenger growth in the final quarter and a revised profits forecast up nine per cent. They’ve just taken delivery of a new fleet of aircraft. I don’t get the sense of that position, either.’

‘Wynn Resorts,’ said Hoffmann, reading off the next screen. ‘A million-two short at one hundred and twenty-four.’ He frowned, puzzled. These enormous bets on the down side were unlike VIXAL’s normal complex pattern of hedged trades.

‘Well that one truly is amazing to me,’ said Klein, ‘because they had Q1 growth up from seven-forty million to nine-oh-nine, with a cash dividend of twenty-five cents a share, and they’ve got this great new resort in Macau that’s literally a licence to print money – it turned over twenty billion in table games in Q1 alone. May I?’ Without waiting for permission, he leaned past Hoffmann, seized the mouse and started clicking through the recent trades. His suit smelled like a dry-cleaning store; Hoffmann had to turn away. ‘Procter and Gamble, six million short at sixty-two… Exelon, three million short at forty-one-fifty… plus all the options… Jesus, Hoffmann – is an asteroid about to hit the earth, or what?’

His face was practically pressed against the screen. He produced a notebook from his inside pocket and began scribbling down the figures, but Quarry reached over and deftly plucked it from his hand. ‘Naughty, Ezra,’ he said. ‘You know this is a paperless office.’ He tore out the page, screwed it into a ball and put it in his pocket.

Francois de Gombart-Tonnelle, Elmira’s lover, said, ‘Tell me, Alex, a big short such as any one of these – does the algorithm put it on entirely independently, or does it require human intervention to execute?’

‘Independently,’ replied Hoffmann. He wiped the details of the trades from the screen. ‘First the algorithm determines the stock it wishes to trade. Then it examines the trading pattern of that stock over the past twenty days. Then it executes the order itself in such a way as to avoid alerting the market and affecting the price.’

‘So the whole process is really just fly-by-wire? Your traders are like pilots in a jumbo jet?’

‘That’s it exactly. Our system speaks directly to the executing broker’s system, and then we use their infrastructure to hit the exchange. Nobody telephones a broker any more. Not from this shop.’

Iain Mould said, ‘There must be human supervision at some point, I hope?’

‘Yes, just like there is in the cockpit of a jumbo – there’s constant supervision, but not usually intervention, not unless something starts going wrong. If one of the guys in Execution sees an order going through that worries him, naturally he can put a stop on it until it’s cleared by me or Hugo, or one of our managers.’