If you’re the kind of shop that continues to send out blind supers during dull markets and earning season, you’re playing a fools game and good luck to you. In today’s world of penny and subpenny commissions, the days of supering bids and offers left and right just to attract something are long gone, the economics no longer work. Today’s client just cruises the machines, and if the stock should trade to levels they like, they look to see if anyone has the other side, they make the call, put it on the tape and move on. It’s not personal, that’s they way it works. Clients want liquidity, the kind that doesn’t come with a song and dance. Now I enjoy pointing the finger just as much as the next guy, but when one of your gun slingers get tagged when your client comes in and sells you 249k shares of ABC (their whole number) in response to your super for 250k – Remember that it was your idea. Now bend over, take it like a man and don’t blame the client when you start bleeding. Try telling your wife it’s the prostitute’s fault you’ve got the Clap.Unfortunately, as Wall Street continues to reinvent itself, a new type of client has evolved and has been popping up amongst the smaller shops, usually start up hedge funds. Now I’m not saying the sell side doesn’t have it’s fair share of issues, trust me, I can tell you from my own personal experience, they run deep. However, there is one particular group of buy side pirates I wanted to address today. I’m talking about a new breed of frustration, and some of the most abrasive personalities in the business, the Takers and Pullers
Taker – A Taker is a client who utilizes everything you have to offer and gives nothing in return but aggravation. These are the guys, that despite never paying a single dollar in commissions to your firm, still receive your research, demand to see orderflow and aren’t shy about attending your golf outings. How do they get away with this? These clients have got carrot dangling down to a science. It’s because weak minded research sales people refuse to believe they are being taken advantage of, have allowed the customer to convince them that they will be the “next big thing” and when all else fails they simply blame the sales trader for the lack of commissions. It’s crazy. These misguided salesmen are so convinced that the account is packed with potential they often transfer their delusions to the trading managers who then turn to the sales trader and discuss why they need to be more focused on the account. Thanks.
In any other business these people would be considered criminals. What would happen if Saks Fifth Avenue operated the same way? When security camera’s pick up some old lady stuffing lipstick and perfume’s into her fake fur coat, do they say nothing, send her Mets tickets followed by a $1,000 steak dinner because they think there’s a chance she comes in before year end to buy a $20K Louis Vuitton Luggage set? Fuck no. They have her removed and prosecuted. It’s called shoplifting. The only time these people come in handy is when you need names to put down on your expense reports. Sure you’re not supposed to do that, but it’s kind of like sliding though a stop sign. You’re not stupid. You look around and make sure nobody’s gonna get hurt (or looking), and you keep going.
Puller – A Puller, although not as sophisticated can be equally as annoying. A Puller is a client who likes to pull your pants down, ask a million questions about something your working on for a real client on and uses that information to their advantage. They call only when they want something and just like a taker, they to0 give little in exchange. These people can’t help themselves. Part of your job as a sales trader is know your client. Eventually, after you get to know them professionally, you begin to learn certain things about them as individuals. You begin to find out what makes them tick – if they like to get after it or if they’re the kind of guy that rushes to catch the 4:30 train to the wife and kids. Another thing you start to pick up on is who their “go to” guys are. Just yesterday one of my repeat offenders called me to see what we had going on in XYZ. XYZ is one tough name that my client and I had been busting our ass’s all day to buy stock without impact. This puller client must think I’m retarded, cause it’s always the same story. “Hey – How’s it going..? I’m not doing anything in the name, but I couldn’t help notice you advertised some volume today… I’m just trying to give my PM some color.” Meanwhile, Incest Securities, where Slippery Rick’s brother-in-law works as a sales trader, has advertised more volume than the stock has traded the entire day. It’s always the same. And just to ad insult to injury he always feels the need to say, “If I get anything to do in the name – you’ll be my first call”… Dude – Blow me.
Tired of his crap, I decided to fuck with him. I told Sphincter boy that “It was just the tip of the iceberg” and that I was involved in “a monster reverse beta spread swap” and that his timing was perfect because I was about to get real aggressive. Then I gave him the old “Gotta Hop!” and hung up the phone knowing his omnipotence would never allow him to ask me what that meant. For those of you not in the business, a “reverse beta spread swap” doesn’t exist, it’s just something you give assholes to chew on while you go about your business.
Taker-Puller Combo – There’s nothing worse than the Combo. You’ve got some zero calling you up (always at the most inconvenient time), with an attitude because you’re trading a stock they care about and you haven’t given them a heads up. Hmmm.. Explain to me again how this works… I call you 25 times a day, send you countless IM’s and emails that you never acknowledge or pay attention to and I’m supposed mind read your involvement in some bullshit stock that trades less than 50k shares a day. Fuck off. If you want better service from the street try paying somebody other than your third market buddy who’s “soft dollaring” your mortgage and your car payment.
Thanks for calling,
Dopey
