On The Market Chapter 9 - Smashing blind strike, a pride and prejudice fanfic

'Right, there's a bug in here,' Will said, shaking his hateful head as he wheeled his chair back away from Neil's desk.

'There's NOT!' Elisabeth cried.

Her voice broke into an undignified shriek when the back of Will's chair collided with her own armrest, thus crushing the overhanging middle finger of her left hand, her good writing hand. With his back to her, Will re-crossed his arms and carried on shaking his loathsome stubbly head.

Roughly two weeks' regrowth of the cue-ball look, it weren't pretty.

Sadly though, she had to agree with him on this: there must be a gremlin lurking in her spreadsheet somewhere, because this just wasn't possible.

Typical, the one day Will was finally getting a live demo of her spreadsheet, something had to go wrong.

Very badly wrong: 150 grand wrong.

She, Will and Neil were looking at a list of 100 or so stocks, worth roughly 55 million pounds, which the bank's fund managers were looking to acquire on the back of new client money coming in. Acquiring 55 million pounds' worth of stock using phones only would have taken the desk about three days, so instead Neil had agreed to farm the whole list out to a German broker called Rheinland Westphalia Bankengesellschaft, aka Rheinland, aka the Krauts.

About ten minutes ago, Neil had pressed a button on something called the Portfolio Integrated Management and Monitoring System, Pimms for short when it worked, "bloody PMS" when, far more often, it didn't. Pimms/PMS was now in the process of sending a copy of the list to Rheinland,

With a bit of luck Rheinland would receive it by 10:23am, at which point they were contracted to sell all the shares on the list to Neil, at the prevailing market prices. Job done, all for the low one-off commission of 15 bips – less than a fifth of a percent. They called it programme trading and until Neil had access to something like tradePad it was the only way trades of this size could be executed in decent time.

Or to put it in modern terms: programme trading was the equivalent of dumping your unwanted stuff on an eBay reseller because you haven't got time to wrap and mail it all: your shelves still get cleared, you save time, they take a cut and everyone's happy.

Elisabeth's spreadsheet had a row for each of the stocks currently on their way to Rheinland. Against the company name and identifier, it showed the stock's price in the closing auction last night, which was the price at which the Portfolio Managers would have liked to buy. Each row also showed how many shares they were looking to buy, and then the current, real-time market price. If the price of a company they were buying went up then this was counted as a potential trading loss, and vice versa.

This way there was a profit or loss attached to each company on the list and then at the top, a total over the whole list, which kept changing faster than your eye could follow as each company's price moved up and down. The numbers only stopped moving if the market was closed, or once Neil entered an actual price he'd traded at, and then the profit or the loss became real. It crystallised.

On a programme like today's Neil would simply trade at 10:23am market prices, a time they'd picked at random to allow Rheinland enough time to receive the list, but not enough to peek at it before having to execute it.

To that effect Elisabeth had, of course, given Neil an idiot-proof button: press it and real time prices got hard copied into the execution price column, so that the PnL was frozen -crystallised.

Each row held lots more information about each stock: price changes over the last few days, weekly high and low, how many shares had changed hands on an average day last week, that kind of thing. Though he'd asked to see this information at some point or other, the truth was Neil never really looked at it on a programme. There simply wasn't time.

He didn't even usually look at the total profit or loss number too closely: with so many stocks going up and down and cancelling each other out, the total was never terribly significant. What's ten or twenty grand on a £55 million trade? Besides, it wasn't like either he or Rheinland could do anything about the 10:23am prices of these particular stocks. They would be what they would be, the market's famed "invisible hand" would decide.

Today, however, it was as if the market had a personal vendetta against Neil. Or against Will, or perhaps against Elisabeth and her throbbing smashed up finger. Starting about five minutes ago every single stock had started moving against them. The conditional formatting, which Elisabeth used to display losses as red and profits as blue, was right now washing Neil's screen in a sea of red. The total at the top had stopped bouncing up and down, now it was more like looking at the dial on a petrol pump: the number only ever got bigger, and fast.

Except in bold red font with a minus sign in front of it.

They now had less than eight minutes to go before 10:23 and Will, of all things, decided to spend the first few checking Elisabeth's formulas. Wheeling himself back in front of Neil's desk he first re-calculated the loss on each stock while Elisabeth, sitting behind him, had to use her hurty left hand to keep the right one from slapping the back of his hateful, stubbly, presumptuous head.

Seriously, he, checking her sums: the insult! At least he knew how to use his control keys so copying and pasting didn't take long once he had his first stock worked out. If he'd wasted precious seconds trying to use Neil's mouse she would likely have snatched it from him and strangled him with its cord.

With five minutes left before 10:23 am, Will had a new total in the cell next to her overall loss, so that now it was like watching two identical petrol pumps tell you how much money you're spending: completely pointless, but still bad news.

'I told you…' Elisabeth started, but Will wouldn't let her finish:

'Neil, give me VOD's prices on Bloomers, now.'

Neil wheeled himself sideways to the nearest Bloomberg terminal and the two of them started calling prices at each other. They were, of course, the exact prices displayed in the spreadsheet so no, Elisabeth hadn't screwed her data links either but thanks for checking, Will. Honestly. What a...

'I told you,' Elisabeth said again, looking up to the clock on the ticker tape above them. Three minutes to go. Her total, and Will's had just crossed £200,000.

Bad, and still getting worse.

In a way, at that point she would have preferred it if her spreadsheet had been wrong. Now they really were about to buy this stuff for almost a quarter of a mil more than it was worth ten minutes ago and that just didn't make sense. To be wrong on this sort of scale, it was dizzying.

But more to the point, statistically she knew it is just as hard to be wrong 100% of the time, as to be right 100% of the time.

So, Elisabeth thought, mentally inserting ∧ between her hypotheses as she would have done back in maths class: if {(this really was happening) ∧ (it was no error) ∧ (it wasn't happening randomly)} ⇒ someone or something was making it happen.

Oh putain, wait:

'Neil!' she cried - and Will said at the same time.

Will shot her one of his trademark dark looks while Neil looked from one to the other. She started again with:

'Could you please…'

'Shush!' Will said to her, reviving an almost irrepressible urge to slap his stupid hateful face. Seriously! To Neil he said precisely what she herself was about to say, except without the Ps and Qs:

'Go check who's been buying Vodafone and DataLogic.'

'I'll take Barclays and Glaxo - if that's alright with you, Will,' she chimed from behind the desk's other Bloomberg terminal. She knew what she was going to find there, but it was essential they gathered the evidence because this was serious, serious stuff. They spent the next minute and a half with Will barking company names at them, and Neil and Elisabeth shouting back "Rheinland, buying up, what next? Rheinland, buying up, next? Rheinland, buyers…"

So simple, as these things always are in the end.

Rheinland had received the list early. Pimms must have had a clear line to their desk, for once. The Krauts weren't supposed to look at the trade before 10:23am, gentlemen's agreement. But clearly they had peeked, and then they'd started trading ahead of their own client. Frontrunning them, as it's known, to the tune of, yes, very almost a quarter of a million pounds now.

It's cheap and easy to move a share price in your favour, provided you know exactly when you'll be trading with someone. All morning Vodafone had been trading around 48p, making the million-odd shares Neil was buying worth about 480 grand. Between 10:19:50 and 10:22:45 Rheinland had sent a dozen or so orders into the market to buy: 10 share "clips", at or above 53p. At that price it wasn't difficult to find willing sellers, so those tiny trades "printed" and for those few minutes 53p became the "market" price, making Neil's shares suddenly worth 530 grand, or £50,000 more than five minutes previous. Total cost to Rheinland: about 50 quid.

Now Neil was contractually obliged to buy that million shares from Rheinland for £530,000, whereas Rheinland was going to have no trouble sourcing them for about £480,000 as soon as they quit their silly price fixing. In other words the Krauts would trouser £50,000 on that trade alone and of course, as a cherry on top they'd also take that tiny less than a fifth of a percent commission, or £800.

Rinse, repeat until 10:23.

Very very naughty. Perhaps not completely illegal, but definitely not gentlemanly and definitely frowned upon, at this very moment, by Neil, Elisabeth and Will.

All three of them fell silent a few seconds before the strike.

10:23am.

Neil pressed the button Elisabeth had programmed for him and a pretty report popped up on a new sheet:

- Trading loss: £254,563.

- Total commisson: £82,500.

Nice helping of cherries on top, then.

Will was the first to recover the use of speech:

'Neil, don't send that report anywhere and Elisabeth, not a word from you!'

'What? I wasn't…' she started, realised she was proving his point, and just about managed to shut back up by blowing on her throbbing finger instead.

'Neil, give me Jens's direct line. I'll take this in 3.11.'

Off he went, while she ran to the ladies' room and plunged her finger under the tap. With adrenaline ebbing back away from her system her finger briefly became excruciating. She kept the tap running a bit longer then walked back to her desk, still wiggling it.

xxx

Fifteen minutes later Will called her and Neil into the meeting room. 3.11 was the nearest to the desk, but it only had two seats. Neil nodded at her to use the last free one but Will stood up first:

'Sorry, Elisabeth. 'your hand all right?' he opened, not at all in the fashion she had expected. But since there was in fact not an ounce of regret to be detected in his "sorry" she stopped wiggling her finger and prayed that he would in return refrain from blurting out such needless, insincere niceties:

'My hand? Yeah thanks, I'll live,' she said, and to everyone's relief he turned back to Neil, and to trading matters.

'OK, so they know we know.'

'And?' Neil asked.

'They're blaming it on some trainee. I'm not buying it for a moment.'

'Nice try,' Neil agreed. 'So they're making us good?'

' 'course.'

'Great!' Elisabeth said. Getting the quarter million pounds back struck her as pretty important, but the guys looked at her for a second as if she were mad, then just returned to ignoring her.

'Are we cutting their line?' Neil asked, almost allowing himself to show some excitement.

Cutting a line was a big deal, the only effective punishment available against naughty brokers. It was modern day ostracism, 20th century banishment, simply refusing to talk to a broker, to take their calls and hence to give them any business. One word from Will to the phone guys and the leds below Rheindland's buttons on the dealerboards would switch off instantly. Rheinland would probably try and get through via the switchboard for a bit, on the non-secure phone lines, but Andy would be delegated to pick up and shout abuse at them until they gave up.

That last part would be fun, but for the rest cutting a broker's line was no laughing matter. Elisabeth's best guess was that Rheinland stood to lose between five and ten million pounds a year directly. They'd also lose business indirectly, through word of mouth and by losing out on the other side of unwinding this desk's trades.

But inevitably Neil and the rest of the desk would suffer too, miss out on some deals that only Rheinland had the other side of.

'I've already cut their line,' Will said, his perma-frown deepening another notch. 'No way can we let them get away with that.'

Where Andy would have been exulting, vituperating and smashing telephones, Will merely recrossed his arms, looking more annoyed than vindictive. This, then, was not a decision made in anger but a cool-headed call. Just because it was the right thing to do didn't mean he'd let himself enjoy it for a second, the stiff sad old...

'How long for?' Neil asked.

'As long as we can get on without them.'

'We'll be fine,' Neil said with a confident nod, 'What do we tell the Portfolio Managers though?'

'Not sure. Is Toad in?'

Elisabeth turned to scan the other end of the huge open plan office.

'Doesn't seem to be in his office.'

'Good! Gives us time to come up with something. For now, Neil, hang on to that report from Elisabeth's spreadsheet and try not to get too specific. Odds are they won't ask any questions for a while.'

'I wouldn't worry,' said Elisabeth, who had sat next to the Portfolio Management team for years. 'It's Friday, Toad and the PMs won't be reading emails.'

'Never mind Toad and the PMs,' Will interrupted. 'That data you showed at the offsite: can it tell us how long Rheinland have been screwing us like this?'

Oh, so now Will wanted to see her data? How interesting. That same data he'd tried to insinuate was off by a third at the offsite? That one? She couldn't help smiling, though she realised it was utterly inappropriate after what had just passed. And in Raj's blessed "collegiate buy-side environment" too... she bit back her smile and pushed her glasses up on her nose:

'Of course, Will. Would you like to have a look at it?'

He looked at her for a while, cocked his head in his familiar cross-armed attitude, lips pursed and brow knitted, while Elisabeth tried hard not to show how much she was savouring the moment. She had him over a barrel: there was no way clunky old Pimms could tell him how long Rheinland had been fleecing them for, so he just would have to try and be nice to her instead.

For a change.

'Will your data tell us?' he asked with another helping of the death-stare. Oh, this was just the best:

'I think it can, yes,' she said, and had to hide her inappropriate amusement by blowing on her middle finger.

'Let's go.'

Well, since he did ask so nicely…

xxx

'OK, Will, if you don't mind,' she said once they'd sat back in front of their respective screens. 'Can we agree on what we're looking at before we get carried away?'

'Meaning?'

'Meaning there's a load of rubbish in Pimms, you know. Warrant activity that shows as equities, those Tokyo funds of course, German preference shares, loads of missed corporate actions, all kinds of crap. Some time if you're having trouble sleeping I'll take you through the twenty odd rounds data cleaning I had to do before producing these figures I did for the off-site. All thanks to our lovely Data Team.'

Will smiled.

For once in his sad stupid life he actually did smile. Crap timing though: Elisabeth had a serious point to make:

'So for now will you just agree to trust my numbers, even if they don't look exactly like those you'd pull from Pimms?'

'Sure.'

Since Fitzwilliam Kingsley Darcy had never acquiesced so readily or unreservedly to anything Elisabeth had ever suggested before, she frowned at him while waiting for the "but", but there wasn't a "but". Will almost began to smile again, then nodded at her to proceed.

'All right, so... let's keep things simple, what fund do you want to look at?'

'Your call - I don't care.'

'OK, just load up the AquilaStar fund since 1st of Jan and tell me what traded value you get,' she said, still expecting to be interrupted or contradicted any second. But no: he turned back to his screens and they both clicked away in silence for a minute or so before she spoke again.

'I've got a little over 253 mil,' she said, 'you?'

'255.'

'Pounds or dollars, Will?' she asked, 'We wouldn't want to get needlessly confused over currency conversions the way we almost did at the offsite?'

'Pounds, Smartypants,' he replied, looking more amused than pissed off with her. How long could this last? Just how badly could she make him want these numbers?

'Take out trades in the liquidity fund, and the warrants,' she said pointing across at his screen.

'253 and a half.'

'253.4, can we call it close enough?'

'If we must.'

To her old teammates in research she would have replied: "What's a hundred grand between friends?" Quants routinely rounded away or ignored much larger sums.

Since, however, Will was anything but her friend, she said:

'Yes, we must- almost certainly pricing errors in Pimms. Now, how many of programmes did Rheinland execute over the last month, according to you?'

'Just one, the second one.'

'Same here. List 906785, 2nd of September, 16 mil traded for Aquila?'

'Correct.'

'I think we're fine,' she said, pointing at her screen, 'look over here.'

He cast a suspicious grey eye first at her face, then at the column of numbers she was pointing at, then lightened up a fraction as he got to the bottom.

'Good news. OK so, Neil,' he said over the top of her head, 'we'll tell the PMs about it as a one-off, brilliantly caught. Let's wait 'til Monday night when we're finished in the small caps.'

'Sure, boss.'

'I'm off for a run.'

You're welcome, thought Elisabeth, and shook her head and her hand while Will disappeared under his desk to retrieve his kit bag and running shoes. But then, nothing could detract from the fact that this would make a superb story to tell Raj on their next weekly call. Quarter of a million pounds saved, Will could say whatever he wanted, in fact he could even smash all the fingers of her other hand if he liked: she was happy. She heard Master Yoda shout over at Neil:

'Jock, Peel Hunt for you!'

'Is that cockney rhyming for something?' she asked over the bank of screens.

No idea what had come over her. Adrenaline, probably.

There was a second's eerie silence, then Newbie chortled, followed by Master Yoda and Andy rising up from their chairs just enough to ascertain that only Elisabeth could have spoken. Will re-emerged from under his desk, smiling for the second time in under five minutes, surely a world first.

He slapped Elisabeth on the shoulder on his way out and said:

'You're catching on, Lizzie, you're catching on…'

Lizzie?!

xxx

That evening she stepped down to her front door to find Tom sat under the stairs, reading Moby Dick. What with all the day's excitement she'd forgotten he'd be back in town.

'Hi there! Back already? Lost your keys?' she said twirling his old ones on her right middle finger- the left was still way too sore.

Tom jumped up to his feet, deftly dodging the stairs above his head. He stood between her and the door and kissed her on both cheeks. He'd cut his hair back a bit, but he'd left a boyish mop on top, and what with the wide grin and the general energy around him tonight it was all rather… Elisabeth looked at him for a while trying to think what it was, and he straight back at her with his bright green stare, until she eventually prised her eyes off him, and got on with opening the door.

'So remind me again why you moved out of here in the first place?' she asked as he dumped a small canvas rucksack behind the sofa.

'It was a mistake!' he said with a happy shrug. 'A great, and fantastic mistake,' he added smiling more broadly still.

'Well, glad you're proud of it,' said Elisabeth, and poured herself a glass of water from the tap. She did feel a little thirsty, but mostly she was just after an excuse to look away from Tom's smile.

'Look, for a start, I wouldn't have met you, right?' he said while her back was turned.

'Oh my god you're right! You have escaped a fate worse than death! Lucky you, yay!' she cried, and turned back around when she heard him start to laugh. She must have caught him on a good night.

'But other than that?' she asked.

'Not much: Oxford's rubbish. Sara's ditched me for good, I hate the Bombsite.'

'The Bombsite?'

'The house... Bombshell's house.'

'Right,' she frowned, puzzled, 'So what are you so chuffed about then?'

'I'm chuffed because I needed a change, and I've had one, and I've decided that new is the new new for me. New Millennium coming up. I'm going to get a new job, a new place, a new everything,' he explained with emphatic hand gestures.

She noticed that, like her, he had very long arms. But unlike her he knew how to use them to great dramatic effect, rather than just to knock random objects off the corners of shelves and tables.

He'd taken off his black reefer jacket and was wearing the same dark green sweater he'd had in Oxford. Part of her couldn't help wondering whether he was also wearing the same t-shirt, and she had to make a conscious effort to recall her mind away from his sweaty torso, as she still remembered it from that day, and back to the present:

'Fabulous. Now you know what, I'd stay here and banter all night about your nearly-new year resolutions, but I'd like to take this banker's costume off, and have a shower and make some dinner.'

'Can I watch?'

'You can watch me make dinner, yes.'

xxx

'So I take it you'd like something to eat?' she asked when she got back to the lounge and opened the fridge.

'You making apple tart?' he asked, turning around to flash her another cheeky grin over the back of the sofa.

'No, I'm afraid that's strictly a weekend treat only. Tonight for a change I'm having pasta. With bacon and…' she rummaged through the bottom shelf, '…spinach.'

She got everything out and turned back to look at him:

'And forr instant addid Frrrenchness, sourrrr crrrim and black pepperrr?'

'Oh, so that's how you add instant Frenchness?'

'Pretty much,' she said, thought about it, pouted, then pinched the air with her left index and thumb: 'And a little nutmeg, actually.'

'You know that's got hallucinogenic properties?'

'I didn't, but clearly you would.'

'Yes please, anyway. Let's get high!'

'Don't bet on it.'

She started wilting the spinach straight in the frying pan with the cream and bacon, while boiling water for the pasta on the next ring. In the absence of a mortar and pestle she then gave three peppercorns a hearty whack on the worktop with the bottom of Ben's jar of Marmite, which made Tom jump and, momentarily, stop smiling at her so distractingly. It was all ready about ten minutes later, and she served out two large plates which he came over to pick up. They sat down at the foot of the sofa amidst a dense constellation of coffee mug rings and, for a while, they just ate in silence.

'This is really nice,' he said halfway through his plate.

'Thanks.'

'So you coming out tonight?'

'Where?'

'Pub.'

'Sorry I can't, big day tomorrow.'

'Can't be: tomorrow's Saturday.'

'Swim, shop, clean, laundry, brother's kids,' she started to enumerate on her fingers.

'You're laundering his kids, are they that bad?'

'No I'm just babysitting them but yes, of course they're a complete pain. Cute, but a pain. And they're having more.'

'See, that sounds to me like you need a drink.'

'No, it sounds to me like you need a drink, and I need a good night's sleep.'

'Oh come on, surely you need a drink. Drown your sorrows with us?'

'I haven't got any sorrows!'

'Haven't you?'

'Nooo, moving on and catching on, onward and upward and all that! I made a quarter of a million pounds today. Well got it back, anyway: I'm feeling quite chuffed with myself, thank you very much,' she said, patting herself on the shoulder.

'Ouch!' she added, having forgotten about her hurty finger.

'Anyway, out of your quarter million can I have five grand? It'll be nothing to you.'

'Don't be greedy. Some of us haven't got a trust fund, remember? And anyway the bank made that, or actually its clients so yes, you're probably already five grand richer, and all thanks to me!'

'In which case I categorically must buy you a drink.'

'Another time, Tom, by all means,' she smiled.

This day was getting better by the minute, and she was beginning to feel more than a little pleased with herself when Tom started again in a darker tone:

'FYI what we own is a bunch of villages in Galway and Wiltshire: land houses and sheep, nothing your lot could trade.'

'Sorry, point taken,' she said, and looked down at her plate. In truth the only point she'd registered was not to bring up the trust fund again. Clearly money that old was no laughing matter.

'But you should come and visit sometime,' Tom added, changing his tone all over again.

She liked this one better, undeniably, only she wished she could trust him to keep it up. So before she spoke again she made sure she sounded less lightheaded than she felt:

'That sounds very nice, Tom, perhaps in the summer. Tonight I'm definitely going to read and have an early night, if you don't mind. How are you finding Moby Dick?'

'Have you read it?'

'When I was in Hawaii. It's full of whales there. Swarming with them, sometimes, spectacular. Are you enjoying it?'

'A whale is a spouting fish with a horizontal tail...' Tom quoted, 'It's a strange book, isn't it?'

'It is. Have you got to the bit where they're boiling the blubber?'

'Don't think so.'

'It's the best part. Truly infernal. Interesting bit of engineering history too.'

'I look forward to it. Shall we discuss this on our way to the pub?'

'No thanks. I told you: early night.'

But I'd love it if you were to carry on begging, she thought as she heard Ben come in.

Glossary:
Pimms is a summer cocktail popular in the UK, especially with spectators at tennis, cricket and polo games.

Dealerboards are the phones used by the traders. Instead of a dialling pad dealer boards have one button per "line" to each broker. The numbers are pre-programmed and the lines can be shared, so multiple traders can "conference call" to the same broker by "clicking" in and out of the line. Again, it's the sort of technology a modern mobile phone could nowadays just about support. However, unlike with a mobile phone each line is secure, and recorded for audit purposes.