Laura Pedersen. The Final Frontier

Laura Pedersen. The Final Frontier

Laura Pedersen began working on Wall Street in 17 years to 20 years, she has, incidentally, was the youngest, which had its own place on the American Stock Exchange (her employer rented a place for her, because she was not of age for possession of .) Not yet reached 24 years old, she made $ 1.5 million Raised in the suburbs of Buffalo, Pedersen born entrepreneur: in six years, selling tomatoes from the garden of his mother, played poker and bet on horses, inten years asked the company's stock, "Pepsi Cola" as a birthday gift, at age 14 went to New York to tour the American Stock Exchange (AMEX). After the first semester of boring at the University of Michigan she quit school. If I wanted to be a movie star - she thought - I think I went to the west, to Hollywood, but since I only wanted to make a fortune, I flew to the east, on Wall Street. "

In January 1984, Pedersen began work as a clerk, earning $ 120 a week. She worked at several companies before you settled in, "Spier Leeds Kellogg / investorz Company" as Secretary of traders. When traders went on a smoke break, she briefly replaced the them. It was a world full of obscenities and vulgar gestures. As Pedersen said: "Four years, three months and thirteen days I was selling - first as a pinch-Hitter, then as a certified professional - I did everything that the parents told me never to do." In the four plus years she has done for his company's $ 5.3 million a decent profit. In October 1987, during the collapse, she made $ 100,000 in one day, when the bubble burst, but the next week, lost $ 1.6 million

Pedersen finished its work, visit the doctor, who advised her to leave, because the consequences of her health problems were associated with the throat, ears and eyes. She was 24. Over the years, she kept a diary, which became the book "play money" (Play Money). In this book she recalls those extreme moments, like during a fire no one left the operating room exchanges, for fear of losing money. Laments in the book was not. "The reason I wrote" play money "- she said - in my desire to testify to what I perceived as the last gasps of art trader, almost replaced with an excess of high-tech." In "The Final Frontier" painted an accurate picture, it means to be a trader, and explains how to survive in an animal pit.



If there is such a thing as a work of "spiders in the bank", the trading pit options very closely corresponds to this notion. One of my friends used to say when trading in full swing: "The only important rule - to have time to poke a finger in the eye of man, before he poked in yours."

But the days of the shop floor may be numbered: the whole concept will be forced to anachronism, as in the early twenty-first century, the market will be fully automated. E-commerce has made a radical change in the stock market in Cincinnati, covering approximately five hundred different stocks listed on U.S. exchanges, and overseas antiseptic and Gonkongovskaya London stock exchanges having electronic commerce, now even in the most active trading days, brought no more than a grocery shop.

In the next five years it is expected that the New York Stock Exchange and a consortium led by the American Stock Exchange and Chicago Board Options Exchange, will go on around the clock global electronic trading. New York Stock Exchange has launched a program that will effectively bypass its members by means of an electronic system, bringing buyers and sellers, ie, provide a function that the last two hundred years, performed by specialists. In September 1990, a simple acknowledgment of plans to trade around the clock convulse with fear thousands of workers in the hall of brokers and traders, who saw clearly in front of a sign. Many already feel useless, as they see their wages reduced due to the widespread imposition of contractual fees, even more reduced due to an automatic system to execute orders. Today, the clerk in Little Rock, Arkansas, in the office, "Merrill Lynch" need only click a button to buy ten thousand shares or twenty options directly from a specialist across the country, completely bypassing the broker operating room exchanges. Will the trader behind?

At the moment, traders are still out of danger, and the hall is one of the few places on earth - the last frontier, where there is still opportunity for high school graduates to start working courier quickly grow to a clerk to do nothing less than a hundred thousand dollars a year and learn how to sell to your twenty-fifth to finish the job with a company for trading in securities of many millions of dollars.

Not everyone can become a specialist, though many try. One takes a lot of practical experience in trade. Others need to be a strong person, physically and mentally. According to statistics, stock market, the average age of a specialist in forty-one years spent twelve and a half years to gain experience trading in the hall, and four and a half years spent working in any other sector of the securities industry.

However, the introduction of index options trading helped accelerate the learning process. I was told that I will learn in six months of intensive hard work as a clerk in the pit as much as twelve years of work the broker on the trading floor. They were right.

Trading index options became fashionable and rose in volume more rapidly than anyone could have expected on the exchange.

Stock indexes were created to protect investors who trade large portfolios. Thus, mutual fund managers who control large blocks of shares, using the position of "selling" of stock index contracts as a hedge against falling stock prices, as well as cotton farmers use futures to protect themselves from falling prices for cotton. Conversely, investors who plan to buy shares in the future, can guarantee a price, taking the position iideksovy contract with "buy". One reason for the unexpected success of the indices was a new generation of speculators, or those wishing to become buyers or sellers, depending on how they felt, whether or not stocks in the index to rise or fall.

Like other shares and options, index options are given under management firms to specialists, all that is required to open a company, they are two or more traders, operators of a certain stock or stock options with a proven track record and a lot of capital. Compared with full-function large firms that provide their customers with all kinds of services such as research, sending monthly statements and investment seminars, company professionals provide services to an absolute minimum. All they do is sell, and do so very selectively.

Under the rules, regulations and bylaws of the Exchange specialist firm assigned to "conduct a fair and orderly trading" and "by buying or selling, if more than the market there is no other buyers and sellers of" designated goods. Our product was XMI, the main market index (Majog Market Index). Even if we wanted, we could not take any other product has such a large XMI for the time when I worked for AMEX. And the stock exchange had to repeatedly rebuild the pit XMI, to accommodate the growing number of people, by the time I left the pit AMEX XMI occupied most of the northwest quadrant of the main trading floor.

Due to the fact that all of their business is carried out in the hall or in the pits, and their staff do not have relationships with investors, other than through the transmission orders of brokers, companies, professionals do not need to have offices outside the exchange. That's why investing public rarely hears about them. (The only reason we have offices in the house at 115 Broadway, as well as on the Exchange, was that the firm "Spier Leeds Kellogg End", which owns nearly fifty percent of our company is located there its headquarters.)

Most of the firms specialists tend to be very small, fiercely independent-minded to defend his territory and very profitable. In fact they do not do anything to gain notoriety outside of the shop floor, but they are well known in the securities industry, as shares or options are assigned to them by the Exchange.

The role of the specialist was a long time together with the rapid growth of stock trading during the speculative frenzy that followed the Civil War. Until 1869 Vice-preeident American Stock Exchange (Curb Exchange) read out loud the crowd gathered around him a complete list of brokers shares of the New York Stock Exchange, traded on that day, quickly listing the current bids (highest price you were willing to pay at the moment ) and the asking prices (lowest price at which were ready to sell). So he did three times during the auction. Brokeru'ne who had a current quotation board and running "strings" to fill the orders had to spend hours waiting for the names of some ad campaign. One thing is when a broker acting for the ordered purchase price (market order), but in the fickle, many investors do not dare to sharp price changes during the period between placing and execution of orders, dictating the upper and lower limits on their purchases and sales orders. With the advent of more and more issues of shares that traders no time to dally in anticipation, and they began to pass "limit orders" a new breed of sub-brokers, which soon became known as "specialists." That their efforts were worthwhile, the broker, who works in the hall, shared their commissions with a specialist. Of course, that when new shares, the role of the specialist has grown - as well as his strength - and he soon took on the role of market maker. When in 1921 the Exchange moved to a room instead of experts to talk on the sidelines, began to assemble at designated sites or "trading post", forcing trading partners to come to them.

Modern experts to perform their functions of market makers shall be the same in four people - often at the same time, so mad were the days - a broker, dealer, auctioneer and referee

As a specialist broker holds warrants that can not be executed at a price specified by the client until such time until the opportunity arises.

Specialist, under the rules of the Exchange, to act as the dealer assigned to it of shares and options. In doing so, he must venture capital firm, buying and selling at his own expense, where there is a temporary imbalance between orders to buy and sell. To close the difference between bids and offers specialist, trading at its own expense, may offer to buy at a price higher than the others agree, and sell at a price lower than any other offer.

As an auctioneer, when the bell rings, the specialist sets the opening price for the shares and options. If you need to re-opening of the suspension of trading, specialist controls and settles the imbalance of orders, setting new prices.

Experts involved in each transaction, even if not involved in financial terms. Here's how they work as arbitrators or active days as a police regulators. Someone has to separate brokers representing orders of the public and institutional orders from traders take positions for their personal accounts, priorities are usually set on a "first come - first served" basis, "shouted the first - the first to hear." Case expert to monitor this cacophony and determine who was the first, and who claims to be the first. Although, according to the rules of the Exchange, from the experts want to risk your life ye and stop scandals rastaskivaya them involved, they are empowered to impose fines ranging from five hundred to one thousand dollars - with the approval of the official representative of the trading floor.

Company management specialist on the trading floor can be very profitable, because you are in an ideal position to quickly respond to incoming news, often at their accomplishments. Counterbalanced by the fact that because of your oath to "do the markets' risk capital firm, you can be destroyed in one day, what really happened to a number of firms, specialists in the crash in October 1987. Unable to get rid of the enormous amount of time shares and options to meet the requirements or making additional margin, they were ruined unexpected free-fall markets.

These traders are working in such stressful conditions, which is not surprising to see active days, as traders are tearing their positions cards or grab your keyboard "Kvotronov" (computers, featuring market data in real time) and run them in the terminal screen. I saw one fellow grabbed the entire unit and threw it on the floor.

Phones seem to be most vulnerable to attacks of rage: neither the day went to at least five of them were torn from the walls, or thrown through the trading post. The cases have become so bad that it was said that the company "New York Telephone," a well-fed up with the fact that she constantly had to replace the machines, after all, asked the Exchange to buy myself that their wholesale and installation work performed herself. Now that the Exchange has its own army of plumbers in the audience to prioritize the repair of vehicles in the same way as is done by military doctors, wandering across the battlefield after the battle.

Imagine the scenery of the conning tower spaceship "Yu-Es-Es Enterprises" passed undisciplined fourteen-owner the world's largest designer "Erector", whose father provernuli corner on the market of video monitors, and you begin to think of our work environment. Having the form of the octagonal enclosure away from the main trading hall, a hole in reality - it's frozen rows and tiers of raised platforms with rubber coating. They are separated by several passages leading to the main hall of the Exchange and hopelessly cluttered computer keyboards, monitors, timers, trays for orders, heaps of phones, half-empty cups of coffee foam, hundreds of unopened packs of ketchup from the foil and plastic bags with soy sauce, empty cans under aeration, the coils with insulated wire, plexiglass boxes that resemble cells of hamster, piles of notebooks and standing near the exit and largely unused huge garbage tanks and a couple of brushes for floor.

Wherever you go you run into a large metal pipes and beams, teeming with strange-sized screen video displays and terminals - our "database". Screens range in size from six-inch personal monitors to large-sized boards, available in most high schools or high schools. The first impression was a friend to visit me, "That's great! Just like the wall TV in" Sears "!" There were so many video monitors, piled, apparently at random, if you look down from the balcony that runs along the main trading room AMEX, then see what is happening inside the well was impossible. I suppose one could argue that both wanted control of the Exchange, but then it is assumed that they actually hired a designer of space.

In fact, the pit grew from a trading post and decorated as the proverbial vine, mad, consuming more and more space for increasing the volume of XMI. Change comes when needed. Initially, the pit was littered with twenty or so boxes from the fruit and cardboard boxes, thank you 'Greenwich Gourmet Delhi ", which are typically low rose traders and clerks to read a number of icons broker when the time came to register the transaction. These boxes to transport fruit to the country could not withstand the weight of people jumping and jump with them, and thus are usually not kept for longer than one day. Clerks are confused when they stood on a box, horn furiously, and suddenly found that they disappeared from view as the boxes were broken one after another. View this could also offend a sense of decorum manager, so one morning was a consultant for spatial design with a notepad to ask us all sorts of questions about our work habits. And soon cardboard boxes disappeared. In their place are the carpenters built and installed wooden boxes, covered industry, "not moving" a coating of black rubber. We all fought for the new box as tigers, their kitten for food - our clerks. It is necessary to keep them happy. It turned out that this is the least of our problems.

But this did not happen.