Memoirs of a Minyan: Let the Games Begin!
The purpose of the journey is the journey itself.
Chapter 3: Let the Games Begin!
I remember my first day on the derivative desk at Morgan Stanley's (MS) New York office. There I was—6'1", 215 lbs of muscle, straight A’s in my back pocket and so scared I could hardly move.
It was precisely where I wanted to be, rubbing elbows with the hitters and holding my own in the big leagues. Armani suits, wing tip shoes, fat pockets—I remember thinking that one day, that would be me. At whatever the cost and no matter the sacrifice, that was professional nirvana.
There was one small flaw in my master plan—I was utterly and absolutely clueless.
I was placed at a turret in the middle of the trading desk, a nervous dingy in a sea of testosterone. They gave me a computer, two phones, a few pages of positions and told me to pick up blinking lights and relay messages. Easy enough, I thought. Piece of cake.
The red light—one of hundreds of lines to various exchanges, brokers and offices around the world—began to blink.
"Twoandthreeeitgths threequarters fivehundredup!"
I sat there staring at the green, silent light wondering if the person was speaking English. I looked around to see if someone could help me translate but everyone had a phone on each ear.
"WHO THE F**K TOOK A MARKET FROM THE AMEX?"
The words sliced through the room in a high-pitched voice and everyone—everyone—stopped what they were doing. I swallowed hard and slid down in my chair as Chuck screamed at the clerk on the Amex, calling him a liar and threatening to fire everyone in his family.
Thank God I never said a word when I picked up the phone. Thank God nobody knew it was the new kid in the cheap suit.
The Boston Bruin
The Morgan Stanley trading room was a massive labyrinth that occupied the entire floor of 1251 Avenue of the America’s. The equity derivative desk was nestled against the far, center window with the listed stock desk, over-the-counter trading, convertibles and international department strategically situated around it. If trading was the bloodline of Morgan Stanley, options were the heartbeat and the fervor of each day’s flow seemed to center on our desk.
I noticed one of the traders on the over-the-counter desk made more noise than the rest of them. He barked orders and everyone followed his lead. He was the alpha trader. When he laughed, the mood lightened; when he yelled, everyone tensed up.
David Slaine ran OTC trading for Morgan Stanley. When one of his customers had business to do, he walked over to the option desk to set the price. During one of my first days, David was standing behind my chair haggling over an order and when I turned my head to catch a glance, he looked down and introduced himself.
"You look like you work out," he said in a thick Boston accent, "You should come to the gym with us after the close."
Bingo. I couldn’t relay an order to save my life. I didn’t understand most of what was being said around me. I had no idea the US economy just emerged from a deep recession and the seeds of a bubble were being planted. But I knew how to lift weights. If nothing else, I knew how to lift weights.
That afternoon, I joined David and Tommy Carden, a trader on the option desk, for a workout near our midtown digs. There was camaraderie between them, a bond forged by long days in the trenches. They were warriors that waged a vicious battle each day, side by side, one for all and all for one.
It reminded me of my pledge class after a semester of hell, a feeling few folks understood from the outside looking in. It was very much a fraternity I wanted to join.
Engine Room, More Steam!
It was all happening so fast. I graduated magna cum laude surrounded by family and friends, worked in a bar where everyone knew my name and landed a coveted job at one of the world’s most prestigious financial institutions.
One week later, I lived in the den of my grandparent’s apartment, got up at the crack of dawn and worked in a place where I was so intimidated that I didn’t get up to go to the bathroom. I had to earn my stripes all over again in a strange, new world. What I lacked in experience, I was determined to make up with effort and energy.
Unfortunately, despite four years of rigorous studies and the debt to prove it, I didn’t have a practical working knowledge of the business. When I asked one of my professors how to better prepare for life as an options trader, he told me to read The Wall Street Journal and study Black-Scholes models. Neither did much good.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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