When a good friend of mine ripped my face off after the bell the other day, I finally came to a conclusion about something that had often crossed my mind. After nearly two decades of sitting on a sell side desk catering to the spoiled brat’s we sales trader’s often refer to as clients, that no matter how well you know your client – you should never expect them to show any appreciation for a job well done and more importantly, never expect them to make an ounce of sense. Ever. I don’t care how long you’ve known or how well you think you know your client. Honestly, it doesn’t matter, even if you’ve been covering the jerk for fifteen years, you’re the God father of his only son and have plans to take his entire family fishing on your boat next weekend – they are conditioned to act and react like complete assholes when the orders they are working go against them.
Your client could be positively brilliant (highly unlikely), an advisor to the NYSE, NASD and the NYSE or maybe even teaches some night classes on the fundamentals of equity trading over at NYU. It doesn’t matter. If and when a stock moves against them, all facts, logic and undeniable truths get thrown out the window. You could have performed the greatest executions in the history of the stock market for 27 days in a row, but god help youif the market should move the wrong way on the next order. It’s your fault. Always. Clearly the other 98% of your previous flawless executions were just dumb luck as you have now just been identified as a complete failure, a bad call, a mistake and just another sloppy heavy thumbed overpaid broker.
It’s 3:52 and I’m in the process of wrapping up my tickets for the day, when he calls. The markets coming off like a prom dress and my buddy sends me a 50k share sell order in a stock we haven’t trafficked in for weeks (first red flag). The stock had a 4 point swing that day, was five cents from its low and in the midst of a free fall. My only instructions were, “Take care of me, I gotta be done.” … Sweet. It wasn’t long before I was being reprimanded like a three year old for abusing my chance to shine, forcing the stock though it’s intraday lows and it was also brought to my attention how “It’s always the same story when he comes in.” Are these people just conditioned to say shit like this? Fuck off.
You damn well better believe that my customer and I both know he was selling that stock all day, sapped every ounce of liquidity from every algo, dark pool, black box, X-box, Playstation, and whatever other “smart market” crossing network happens to be the flavor of the day and then gave me the balance of the order because the stock was collapsing, the market was about to close and he panicked.
For those of you having a tough time following along because you’re not involved in the institutional equity business, let me give you an analogy. It’s like creeping into Sak’s with a fedora pulled down over your eyes, wearing a trench coat, buying up every single Tommy Bahama shirt they have on the rack, in the the stock room and maybe even go as far as to back-order a few. Now you go home, take off your trench coat and just minutes later return to that same store looking for a Tommy Bahama shirt. A little bell in your head should probably go off reminding you that you’re not going to find one there just minutes after depleting what was available to the market. But your bell is broken, and instead you totally freak out on the poor sales associate reminding them how they have been selling Tommy Bahama’s all day, for never having your size every single time you come in and how you’re sorry you even set foot in the door. Something else comparable would be like trying to reason with your wife when she’s upset about something. It’s not going to happen.
Why is it so common for customers to defy logic, cold hard facts and honestly believe themselves to be right when they haven’t got a leg to stand on? Unfortunately, it’s all part of a natural trading cycle that both buy side and sell side play an important roll in. Since nobody is born understanding how to trade stock for institutional money managers properly, there is a learning curve. In the early stages of a sales trader’s life, a sales trader often finds himself getting verbally abused for both mistakes he’s made and for no good reason at all. Since the young sales trader, in his crucial developmental years, is often too green to realize he’s done nothing wrong, he will tend to agree with the clients delusional complaints and will go as far as to reprimand his own position trader for taking advantage of his client. As the years pass and the buysider’s sales coverage changes, sometimes digressing, clients are periodically exposed to these Johnny-come-latelies who unknowingly and for a lack of better understanding, continue to fuel these ignorant fires reinforcing the idea that it’s OK to cry like a baby when things don’t go their way.
Anything else need be explained?
Dopey
