Zero Alternative (7 page)

‘I trust my guts, mate. DeepShare has just made me feel better about it.’

Balancing Act

Walker returned to the floor, sidestepped a couple of salespeople deep in conversation and almost bumped into ‘Beano’ Friedman, Dorfmann’s European CEO. Friedman’s office was two floors below, in the middle of fixed income, but as a former Equity Derivatives trader – an awesome one, really – he often liked to hang around his old stomping ground on busy days, and check how things were going, in person. Walker knew him quite well: had, in fact, been hired on his desk by Friedman, then Head of Derivatives, when he was still a graduate trainee.

‘Yours, are trying to kill me?’ Friedman’s thin cultured voice belied a massive six-foot-four, overweight rugby-player frame.

Walker stepped back, smiling. ‘I’ll let the bond traders do that. They get violent when they lose money, I hear.’

‘Bad day, I’m afraid,’ Friedman sighed. ‘You should be cleaning up though, right?’

Walker was always surprised by how well Friedman seemed to know the bank’s books, down to the details of many individual traders’ positions. He probably spent his nights going through risk reports across the board. Friedman had become the chief executive of Europe just after the 2008 crisis struck; the lack of understanding of his predecessors – and the damage it had caused the bank – must have scarred him badly.

‘I can’t complain, Beano.’

‘Taken much profit yet?’

‘Nope. It’s not an easy shout at the moment.’

‘It never is,’ chuckled Friedman, patting him on the shoulder before heading towards the office of Dorfmann’s Head of Research. After a couple of steps he turned, his tone more serious. ‘You’ve made the right calls in the past, Yours. Don’t start doubting yourself now.’

Walker nodded, smiling, and hurried back to his desk. The Futures were dropping again, trading near the lows of the day. He checked the time: 10.42 a.m., just minutes until Rossini was due in a press conference.

The tension was increasing once more and terrified traders returned to selling heavily, trying to reduce risks. Computers got into the game and pushed the market through the previous low point, gapping it down another twenty ticks.

The Eurostoxx is off almost eight per cent; a few more points and trading will get suspended
again
.

Taking a deep breath, Walker grabbed his new mouse and started buying large amounts of Futures through ORK. He turned to Steph, who was typing away at one of his keyboard.

‘Yo, it’s time. Drop that, whatever it is. Call Luigi Seu and start selling some of our puts, the December expiry first. About ten to fifteen K, all the ones we have on the book for that maturity. Tell him to speak to the smaller guys first, I’ll need the whales later.’

‘Sure boss.’ Stephane picked up the phone and got Luigi to work.

Walker looked back at his ORK, then rechecked the risk-management system. To lock in his profits for the day, he would need to sell most of his Options while buying back the thousands of Futures he was still short of. It was a delicate exercise, a no-net tightrope walk that could blow up in his face if his timing was off. He fired off two more purchases, one thousand Futures each. The numbers in his book updated in real-time as the market bounced back a few points, perhaps because of his aggressive buying.

Time to rock and roll
. He stood and glanced at Steph, who was deep in a phone conversation but managed to give him a thumbs-up sign; a second later he walked off the desk, heading for Fontaine’s office.

As he approached the glass partition, Walker noticed that Jack Morden was in the room with Fontaine; both were standing behind the massive glass table studying a row of monitors. The Belgian saw him coming and nodded.

‘Yours, anything going on?’ Fontaine asked in a gruff voice.

Walker stared at his two bosses for a second, then answered, ‘I’m hedging the book, before the press conference in Rome.’

Morden blanched. ‘All… all of it?’

‘Yes. Rossini is going to sound reasonable, and the market will bounce. No Italian default for today.’

Fontaine walked around his desk, coming to stand in front of him. ‘That’s not what our strategists say.’

‘Right. Because Mayweather’s been calling it so well up to now.’

‘I don’t care. We agreed…’

Walker interrupted him. ‘We agreed to speak. Now I’ve told you what I’m doing. It’s my book, I’ll make the decision.’

Fontaine exploded, cursing. He turned to Morden, who was quickly shrinking into the floor, then snapped back, his fat chin wobbling with rage. ‘Fine, grab your money and run. But if we get killed today, no matter how much you make… Don’t expect to be paid.’

Walker took a couple of steps back and opened the door. ‘I don’t. All I expect is to be
right
, again.’ He slammed the glass panel and returned to his seat.

‘
I’m on location. Should I go for it, later?
’

‘
Probably, but I’ll let you know soon
.’

‘
Okay. Any last-minute advice?
’

‘
Just do whatever you have to. He’s the key
.’

Steph was finalizing the December trades when Walker sat down next to him. The Frenchman muted his phone line and looked at him expectantly. ‘All done, boss. What now?’

Walker studied his screens for a moment. The Eurostoxx had stabilized once more, but it was still down about seven and a half per cent, hovering near the day’s lows.

10.52 a.m
.

Walker pointed to his ORK and stood up. ‘Start buying Futures, I want to cover all my shorts in the next few minutes. You’ll need about three thousand here. Get them in small clips, one-hundred-odd a piece. And don’t let the machines sniff us out too early again.’

Steph nodded and came over, taking his mouse and keyboard. Walker checked his work for a split second, then grabbed a handset and reopened the phone line to Luigi’s brokerage firm.

‘Luigi, is the trade with Mosha done?’

‘Of course.’

‘Great. Make sure he pays you triple commission – he owes me now. Did you find someone else in real trouble for me?’

‘Ah,
Signore
. Of course I did. There are some very sweaty traders out there; a large hedge fund and two banks in particular are panicking, and they are scaring whatever few Option sellers we’ve
got left.’

‘Good. Get a couple of your guys to help on the lines – I want to sell to all of them at the same time. I need to see bids on twenty K of November puts, forty K of March…’

Luigi interrupted him. ‘Whoa. Forty thousand?’

‘What, too big for you? Stop fucking around and call these three whales you’ve harpooned – you know who will want what, I guess.’

‘Okay, okay. I’ll ring you back when I have the prices.’

Walker looked up at one of the massive TVs scattered around the floor. Both CNBC and Bloomberg Television were showing live pictures from a studio in Rome, a roomful of journalists waiting for Mario Rossini to start his first press conference as Italian Prime Minister-Elect. He tapped Steph on the shoulder.

‘Good job. Leave it now, I need my chair back.’

Steph stood and Walker glanced at his screens, making sure the portfolio was in order. He fired up the Dorfmann Option-pricing model and inputted the details of the trades he had asked Luigi for. The system would run complex mathematical models to compute the correct values according to real-time data.

Jesus
.

Option prices were exploding even further. He could feel fear seep through his monitors.

The Futures lurched lower, hovering just a few ticks above the trading-halt level. Walker bought thousands, firing orders away as fast as he could. Finally the suspension kicked in and the Eurostoxx stopped trading as it reached minus eight per cent on the day. A five-minute break would follow, before another reopen.

Walker picked up his phone and shouted down Luigi’s line. ‘Talk to me, you bastard.’

‘I’ve got them – just a sec.’

He craned his neck and checked the prices on Steph’s system to make sure they reflected his own. Not a good time to make a mistake.

‘Okay, for the Novembers I can pay you seventy-three Euros each.’ Luigi’s tone carried an edge of tension: the deal was huge.

‘The March is 202, and the June bid is 264. Three different buyers, for your full size. Hold on…’ Luigi muted his line for a second. ‘March is now up to 205. June is 268. They really want these babies.’

Walker bit his tongue and stared at his screen. Dorfmann’s system valued his Options at only 521 Euros each, but things were moving so fast that he could sell them to the market for 546. There was blood in the water.

The extra twenty-five points meant close to a further ten million dollars in profits, if he sold now.
Sweet
. He looked up at the giant TV screen to his right – in Rome, Mario Rossini had entered the conference room and was shaking a few hands, flanked by a couple of his political minions.

‘Scott?’ Luigi’s voice quivered. ‘Are you there? I don’t know how long I can hold these prices.’

Walker smiled. ‘Good job, man. I guess you know what I’m going to say now.’

‘Hopefully…’

‘You’re done, Luigi.’ Walker took a deep breath before finishing in a louder tone. ‘Yours.’

Interlude 2

The Englishman dialled the number slowly, relishing the fact that New York was still in the middle of the night. The phone rang a few times before a groggy voice finally answered
.

‘
Yeah?
’

‘
It might be time
.’

A short break, static on the line
. ‘
Have you spoken to the Australian?
’
the American asked
.

‘
Yes. Pienaar is ready. But you need proof, and I want it to be rock-solid
.’

‘
So when?
’

‘
Let’s see how the markets play out. I’ll know for certain in a couple of hours
.’

‘
Okay
–
just let me know if… when it happens
.’

‘
Fine
.’
The Englishman closed the call, his mind running through the next few steps. The American had sounded on edge, even scared. He scoffed and put the phone down on his desk. When you played for big stakes, you couldn’t worry about collateral damage
.

Chapter Five

End of Day

The trading floor fell silent as most eyes focused on the TVs scattered above the desks. Someone turned the speakerphones to the CNBC audio channel: the simultaneous translation of Mario Rossini’s speech was about to start.

Cameras zoomed in and Rossini stood, his dishevelled grey hair almost glowing in the artificial lights. The former actor looked like a mad prophet about to present the new Commandments, his intense gaze staring right through the screens.

Walker swallowed, a metallic taste in his mouth, and prayed that the next Italian Prime Minister wouldn’t pull one of the stunts that had made him famous. The politician’s fiery rhetoric was legendary; he had won the election by relentlessly attacking the European Union and promising an end to what he called Italy’s debt slavery.

Walker looked around the floor, counting the seconds down. Ties had been loosened, shirts semi-untucked. The air stank of sweat, and little crowds of bankers had formed underneath a few massive LCDs that were stuck to the concrete columns around the floor. Olivier Fontaine emerged from his office and waddled nearer the Vol trading desk. His eyes settled on Walker for a second, a look of pure hatred in his narrow eyes.

Walker ignored him, turning as Steph slid into his own chair and whispered, ‘It’s bad around the floor – one of the risk juniors told me.’

‘How bad?’ Walker said.

‘Three hundred something. If it goes on…’

‘Christ.’ Walker leaned against the backrest, staring at Rossini, trying to guess what was going through the man’s mind.
Did I get it wrong?
He had purchased close to three-quarters of a billion dollars of Eurostoxx Futures, turning his book around in the hope of a strong bounce. If the market continued to tank, he’d give back a lot of his profits and the desk would get absolutely crushed. Fontaine would fall on him like a mountain of rusted nails, unlikely to be satisfied till he had ground Walker’s career into fine dust.

Rossini started speaking, the English translation just a split second behind. After thanking his supporters he cracked a joke, then continued, ‘As you all know, we believe that the Euro has been a disaster for Italy. It has cost the country millions of jobs, and some of its freedom.’

Walker’s heart skipped a beat. The freshly reopened Futures collapsed in a tidal wave of red, gapping down a further four per cent in little more than a heartbeat.

The market had cracked.

Bile rose in his throat, and he almost gagged. A groan spread around the floor, someone shouted and phones exploded in a cacophony of rings. Walker glanced at his profit-and-loss window, struggling not to vomit. He had just lost twenty-two… actually, make it twenty-four million in less than three seconds. And it was only going to get worse.
This could break Dorfmann. And me
.

He could feel Fontaine’s stare burning holes into him but somehow forced himself to look up at the TV. Rossini had stopped speaking, was sipping from a glass of water. The politician’s burning eyes scrunched up with amusement as he sat back in his chair, exchanging a glance with his minions. He cleared his throat and started again. ‘But this is a crucial time for our country. We have decided not to look for destruction, or hate – we must work within the rules. As Prime Minister I will study all issues carefully, without haste. Italy needs time and strong leadership, and our friends in Europe last night assured me that we will have all their support.
We will do everything possible to stay in the Euro
.’

Someone on the floor raised his voice, stunned. ‘What? Is he really…?’

Walker slumped in relief, his entire body tingling with adrenaline. Strangely his father’s face flashed through his mind and he shuddered, looking back to his screens. The blood-red was gone. All of it.