Alice Adams - Invincible Summer

‘Double the size. Okay, thanks for the warning.’

Eva hung up and sat back against the wall, suddenly alert. This was a big deal, a game-changer even, coming so close to bonus time in what was shaping up to be a decidedly unexceptional year. She was going to need a game plan. By the time she heard Julian’s key in the door she’d forgotten all about Sylvie’s phone call, and was pacing up and down formulating her strategy for the following day.

‘Use the French 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 generalizing 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 sense 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 multimillion-dollar golden handshake he’d almost certainly been given to join. That would be achieved through downward pressure, in the form of the tantalizing 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 stigmatizing 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.