During a recent interview with the staff of the Fire Drill Podcast the subject of my trading background came up. The question was put to me: Was “The Wolf of Wall Street” accurate? The crudity and misogyny and drug use and such? I answered by telling them a true story.
Some listeners found the story to be offensive. I don’t know what to say about that, except that yes, it IS offensive. But the best exhortations to morality by definition arise from immorality. In other words: if the shoe fits, eventually Cinderella’s gonna show up at your door with a cricket bat, screaming and demanding explanations.
And with that…vámonos.
So this kid Scott had never been to a strip club before, and…but let me stop there so I can paint the background.
Picture a den of thieves trading floor. I used to be the operations director for one much like you’re imagining, although probably smaller. This was at a niche commodities firm that hedged for a single industrial client in a shockingly unregulated market.
We traded via open outcry, which means we placed bids and offers through telephone brokers—Cantor Fitzgerald et al.—who’d match us up with counterparties by price. Worked like the floor of the NYSE except we and our competitors were all over the country instead of in one central pit.
To maintain a level playing field, however, brokers kept market participant identities confidential. You wouldn’t know who you’d traded with until after you executed, which kept everybody…well, let’s call it “honest.”
Brokers were therefore crucial deal-facilitators, and as such they made a lot of money. A LOT. For instance, a broker would match you and a counterparty for a trade worth $5K, and he’d collect a commission of sixty-five basis points from each side for a total of 1.3%. Sixty-five bucks may not sound like much, but picture collecting a $65 vig on twenty or thirty such trades each day—plus 1.3% of a handful of $500,000 deals a week—and the money added up in a hurry. All this, again, in an unregulated market.
So did brokers compete for our business? Oh, yes. Did they do so in ways that Santa might’ve frowned upon? Oh, HELL yes. Sometimes they wooed us flagrantly; other times they wooed us in ways far more devious and seductive.
Now it came to pass that I, your servant, attended our annual trade show in Houston. One of those junkets where everybody goes but nobody shows up.
Noon. My old buddy Chris and I have just collapsed into a booth at a locals-only diner where they serve massive breakfast steaks but no alcohol. Which is perfect. We’re preposterously hung over and we’re both wearing black-framed sunglasses with lenses tinted as darkly as welding goggles. Protein is in order.
Chris and I have been great friends since the beginnings of our careers. He’s a senior trader at a competitor, which theoretically makes us mortal enemies…and while we wouldn’t hesitate to stab one another in the back, that goes with the territory and it doesn’t get in the way of our bromance. Besides, you never know who might be your next boss.
He checks his phone for, like, the seventh time in three minutes. “Where IS that little shit?” he mutters, all peevish.3
I look up from the menu. “Scott?”
“Scott,” he says. “Swear, if I have to bail him out…”
Scott is Chris’s new trading assistant. Chris hired him straight out of business school, and despite constantly hazing him, Chris thinks the world of him. Scott’s job for the next couple years will be to follow Chris around like a toddler follows daddy, but when his balls finally drop he’s likely to become a very rich man.
The server brings the coffee and we order steaks and kick back and get caught up. Finally the steaks arrive and we dig in.
Scott arrives just as I’m mopping my plate with a french fry.
Chris glances up at him and says, “Where the hell have you—WHOA, what happened to YOU, man?”
Scott’s a staggering corpse. Drained, withered, a rotten smell to him, dark greasy smears on his clothing…hey waitress, forget the steak. Fetch this man a brain to gnaw on!
He sinks into the booth next to Chris and folds his arms on the table and buries his face in them. “I just had,” he says in a muffled voice, “the greatest night of my life.”
Chris cocks an eyebrow. “Yeah?”
“Oh my God. It was unbelievable. Can I get some icewater?”
“Icewater you shall have, my son,” Chris says, an evil smile creeping across his face. “Tell us all about this big night of yours.”
Scott relates the entire episode without lifting his head.
“Amos,” he groans, “that broker from Amerex? He took me to Centerfolds after dinner.”
Chris double-takes. “Amos took you to CENTERFOLDS? THAT PLACE? Did you make it home with your wallet? Jesus, I’m gonna have to straighten that guy out.”
“Amos is awesome,” Scott says. “Bought us lap dances for three hours. At least I think it was three hours.”
I laugh. “That’s about, what, a used Honda Civic?”
“Right?” says Chris.4
“But get this,” Scott continues, still resting his head in his arms. “They close and kick us out and when we get outside two of the girls are standing there by their truck with a flat. Amos is, like, are you guys AAA members? ‘Cause I’m not changing a tire in this suit. So I go all white knight and say I’ll change it. Amos just kinda laughs and says, whatever, I gotta get home, just catch a cab when you’re done.
“And this is where it gets good. I changed the tire and they thanked me and stuff, and I was calling a cab when one of the girls, Yolanda, says—”
“Yolanda,” Chris interrupts. “Yolanda?”
“Dude, she said her name was Yolanda, OK? But Yolanda says they’ll give me a lift, so I get in, and it’s like one of these pickups with a bench seat. Then the little one, Crystal—”
Chris interrupts again. “Crystal?”
“Yes, Crystal!” says Scott. “Yolanda and Crystal! Do you want to hear this or not?”
“I’m dying with anticipation.”
“Yolanda gets in the driver’s side and Crystal gets in the middle and I’m shotgun. And five minutes later Crystal’s going down me. And–”
“Karma’s a boomerang,” I interrupt. “John Lennon.”
Chris frowns. “Lennon never said that.”
“There’s a lot of shit Lennon never said,” I say, grinning.
Chris rolls his eyes, trying in vain to stifle his laughter. “Bastard.”
I shrug. “Sorry, Scott. I didn’t mean to cut you off.”
“I was SAYING, that instead of my hotel we go back to Yolanda’s apartment, and it’s this all-night threesome and doing coke the whole time, and finally I realized it was eleven-thirty and I had to get over here.”
Silence falls. Chris takes off his sunglasses and squeezes his eyes shut and sits massaging them and grimacing. The Law of Irony mandates that I tear off the corner of a NutraSweet packet and pour the powder out and get out a credit card and start chopping lines. Scott, still facedown in his crossed arms, is breathing more and more slowly. Kid’s falling asleep right in front of us, that’s how beat down he is.
Finally Chris sighs. He shoots me a “let’s get this over with” look, and says, “Scott? SCOTT! You realize that was bought and paid for, right? They don’t give it away.”
Scott stirs. Raises his head. “What?”
“The strippers. The hookers. You’re pretty, but you’re not that pretty. Yolanda and Crystal? Amos wanted you to think well of him, so he did what brokers do.”
“What, paid them?”
Chris spreads his hands in mock disbelief. “Who would do such a thing? Listen, the place is skeezy as shit, they’d just been inside charging you guys however many hundred bucks apiece for lap dances, and you think they’re gonna bring you home and team up on you and give you cocaine because you changed a TIRE?”
Scott lowers his head back into his crossed arms. “That asshole.”
“Oh, I don’t know,” says Chris. “Best night of your life, right? He wants your business, that’s all. He thinks he’s gonna make millions off you.”
“Kind of a compliment, actually,” I say. “If he thought you were just some loser, he wouldn’t even buy you a drink.”
Chris chuckles. “That’s right. He’s practically sticking his tongue in your ear.”
Scott suddenly clutches his stomach. “I have to go to the bathroom,” he says, and he lurches to his feet and weaves away.
Chris and I watch him leave. “That kid’s gonna go far in this business,” I say.
“That reminds me,” says Chris. “I need to sign my organ donor card.”
- Not the financial news show, but an intercom slash speakerphone system running on a dedicated line.
- For those interested in more detail: on our trading floor you might’ve heard a broker go, “Sep sixteen-hundreds twenty-four and a half at twenty-five.” This meant that at that particular moment you could sell a forward contract of sixteen hundred units to be delivered in September for $24.50 a unit, or you could buy the same for $25.
To execute you had to say one of two things. “MINE!” meant you wanted to buy the twenty-fives; “YOURS!” meant you wanted to sell the twenty-four fifties. Sounds weird, but it was a hell of a lot of fun.
Or at least most of the time. My friend Matthew had this despicable habit of calling out “MINE!” or “YOURS!” every time we passed a woman in the street. Clearly the man was a pig. If it’s any consolation, he’s since been divorced three times–as in “been divorced,” meaning they left him–and last I heard he’d had to take out a title loan on the refrigerator box he lived in so he could make his child support payments and thereby avoid jail.
- This footnote exists to inform you that it’s been fifteen years since this event happened and I’ve reconstructed it from memory as best I can.
- This is a dumb game we have, where we price stuff in cars instead of money. I one time watched him argue with an ATM–as in literally stand there on the sidewalk yelling at a cash machine–because it charged him for a Yugo when what he wanted was a Dodge Dart.