Invincible Summer by Alice Adams

Author:Alice Adams
Language: eng
Format: epub
Publisher: Little, Brown and Company
Published: 2016-06-06T16:00:00+00:00

Chapter 18

Canary Wharf, November 2005

USE THE FRENCH clients,’ advised Big Paul as he and Eva walked onto the trading floor the following morning. ‘They’re all cunts and it’s not like we have much of a reputation to protect in France anyway.’

‘But I’ll never get close to the size I need from clients,’ she told him as they made their way towards their section along an aisle of desks bordered by banks of blinking screens. ‘I need nine hundred million bonds. That’s huge, half a normal day’s trading volume in BTPs. I’ve got no choice but to do most of it in the market.’

‘You’ve got a point. Okay, here’s what you do. Buy a third in the market over the course of the day, then use another third to ramp the price higher in the last hour before close, then go home short the final third and buy it back tomorrow when the market corrects what will in reality be a move based on no new information.’

‘Isn’t that, you know, a bit of a regulatory no-no? Market ramping?’

‘Well, if you wanted to be really pernickety about it you could call it price manipulation or front-running client orders, but it’s basically a grey area. Everyone does it. What are we going to do, just not make money? Because some other fucker will do it if you don’t.’ Big Paul shrugged. ‘Anyway, it’s your show. Just telling you how I’d play it.’

Eva pondered his words as she reached her desk and placed her coffee down on it, sending ribbons of steam swirling upwards in front of her six screens. He was really just echoing what she already knew. It was going to be hairy, but there was no other way to do it without risking getting her face ripped off in the market when the other banks got wind of the size she needed. She would have to start off quietly, taking care not to move the market too much, and then use her buying power to really push the price up towards the end of the day and fill the client orders at the higher closing price. She opened up her pricing spreadsheet and tweaked a few parameters, then watched with widening eyes as a cascade of calculations flowed across the cells. The numbers involved were not small. This was going to need a very steady hand, but she might just make a killing.

Things started well enough, with Italian government bonds opening up on the previous day’s closing price without her having to buy a single one, giving her the feeling that the natural tendency of the market was to drift gently higher over the course of the day. With a bit of luck that meant she wouldn’t encounter too much resistance when she went in all-guns-blazing to really push the price up towards the close. It would revert, of course; the more something goes up in a day, the more likely that it will correct and come back down the next day, when she could buy the rest of the BTPs she needed at a lower price.

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