For over a decade he was a trader in fixed income (bonds) and FX (currencies). An inconspicuous and energetic man in his early 30s from northern Europe, he is a fast and slightly restless talker. We are meeting at his home.
"As a trader you can be everything you want to be, at least in some ways. You sit at the wheel making decisions with very real consequences. Sell €1m of Swedish krona, and bang, see a directly observable effect on the market. The graph on your screen has a bleep on it and you know: that was me. It's real.
"In a sense you merge with the market. One time I made a mistake and sold $40m of Swedish krona in one second. The market was waiting for an announcement by the central bank and pending this, trading had virtually stopped. There were very few bids or offers; in trader terms the market puked. I suppose there were algorithms or other traders suspecting the news had leaked or somebody had knowledge or perhaps there were stops going off. I got the krona back within a few minutes and before the actual announcement, in fact at a considerable profit. Afterwards you can see your actions in the graph of [price of] the currency and think oh yes, that was my mistake.
"The shouting … well, often we are under quite a bit of pressure and screaming relieves some of that. Especially if you lost because someone failed to, say, process a request or trade fast enough. I would scream, too. There were times when I suspected the bank missed out on millions because someone didn't do as instructed. I would be screaming at that someone for half an hour, until a colleague came in and ask me to stop; there were clients over and they might get disturbed.
"It's really hard to convey what makes a trading floor such a mesmerising place. Guys jumping up and down, shouting 'yours' or 'mine' … bam bam bam. You ask if it's about power? Well, the financial markets are an important part of the mechanisms that enforce capitalism. Politicians may say all what they want, but the interest rates of their sovereign debt have large economic consequences for their countries. And the dealings in the City are part of the process establishing these rates. The same applies to foreign exchange rates. In this way the system rebalances and self-corrects. Perhaps that's what Lloyd Blankfein of Goldman Sachs meant when he said: 'We are doing God's work.'
"Trading is a quintessentially male environment. You have to be on your toes all the time. Say one clumsy thing and it will stick with you for years. Sometimes that's okay because there is often a bit of humour attached to these things. Just as often people are humiliated.
"We play pranks. We once raided the bank's stores of Blu-Tack, a substance used for sticking papers on a wall. Then we put Blu-Tack all over a guy's desk. How it works, you taunt someone but at the same time it's all fun and games. It's a way to let off steam and also a way of signalling to him: I'm in your camp.
"Where I worked people seemed obsessed with power structures and keeping on top. For instance when someone was made redundant a remaining trader would do a deal between his book and that person's, creating a profit in his book and a loss in that of the person leaving.
"How that works is the guy leaving needs his positions [outstanding trades] closed. But he isn't able to check whether the rates are reasonable at which these positions were transferred to another trader's book. In any case he can't do anything about it (when leaving or made redundant you have to leave instantly). Then the remaining traders will complain about the guy being a crap trader.
"It's a dog eat dog world. But at the same time it's the traders versus the bank. This is why I think barrow boys do so well as traders; they seem to have some sort of sense of collaborating against the system for monetary gain. Even the head of markets, the guy in charge of all the traders, seemed mostly interested in maintaining the status quo. He is on the side of the traders, against the bank. Management consists of traders who have worked their way up. What kind of people do you think they are?
"At the next level it is: how do we beat other banks? Lots of the middle office and back office personnel in the bank seem to think that money would come in regardless. No! You have to make a trading strategy, execute and secure your gains.
"In the end the bank is like a shell. You need a place to trade from, this is how we saw our bank. Sometimes an entire team can be poached and go from one bank to another. There's no loyalty either way. And the top at your bank has no idea what's going on, how could they? Why would anyone tell them what's going on?
"Of course traders are constantly inquiring across the bank: what's happening? What are our big clients like institutional investors doing? Then they 'front run' those investors; buying ahead of them so when the price rises due the subsequent buying, they pocket the difference.
"Chinese walls [between deal making, asset managing and trading bankers]? Bullshit. We could simply log on to our system and see what was happening and what they were doing all the time.
"If there is a lot of money at stake then people will not adhere outside rules and they will evade Chinese walls.
"I remember when we had a Thai sovereign debt position. This was before speculation was curbed due to Thai central bank regulation. There were riots with Muslim separatists in the south of Thailand. Several deaths, many wounded. This kind of fizzled out and some of the guys seemed genuinely disappointed the scale was minor and it didn't continue. The reason: we were very short on these Thai bonds [speculated on a fall in price]. It didn't seem to occur to the guy that he was hoping for tragedy in order to profit from it.
"With our trading desk we'd be responsible for a considerable amount of the profits in the entire bank. If you're in that position, what you want is what you get. Business class flights, five-star hotels.
"Many of the people I worked with seemed fixated with money and status. Several guys who would tell anybody about the value of their car or their house through to the size of the tips they had given during their last holiday. I mean, how boring can that be?
"Many did extreme sports for charity, for example run a marathon. We'd be expected to contribute and you could see who of your colleagues gave what – substantial amounts. It's another competition for them.
"After bonuses were announced people would rush out for conspicuous consumption. Within a week they were wearing a new expensive Rolex or driving a new expensive car. They could not even wait for the bonus to be paid out. A lot of traders were gambling on things like the lotto. I consider gambling a tax on stupidity because the house always wins. We would buy lottery tickets in bulk and I would still pitch in, just not to stand apart.
"Personal and business mix all the time. On many occasions we would end up in strip bars or an exclusive brothel. Brokers would pay most of the bills for these things. Brokers get commissions from us when we trade through them, in exchange for which we get client entertainment from them.
"They tell you that the trading floor is a meritocracy but you'd be surprised how often you find a younger family member like a nephew or son of someone high up in the bank. Or the relative of a broker appears, without going through the normal interview process. Also, when you look at hiring practices it is really important that 'your face fits', and once in the job that you toe the line, don't go against the group.
"There seems to be this general impression that most traders are upper middle-class types. I found that the traders were mostly barrow boys from Essex, really tough working class. Tough and churlish. What I found strange was that although several were obviously working class, they would constantly disparage 'chavs' and people with tattoos etc.
"One of my colleagues would talk to his wife, hang up the phone and then make fun of her in front of us. That was perceived as normal. Guys often refer to females as 'wallets', as in wallet-chasers. Perhaps that is actually the reality for some of these guys.
"I'd sit next to a secretary at the Christmas party, a young woman. We were talking about the difficult time she was going through and at some point, maybe because of the alcohol or because she didn't usually talk about it, she broke down in tears. As I was calming her down, I could see in the corner of my eye my trader colleagues signalling: 'get in there'; as in: now go for the kill and seduce her. This is the attitude and over time I felt myself dying on the inside.
"The strange thing is that although I hated many aspects of my job, in some way I loved it. I also know that back in those days I was dying a little every day. But recruiters keep on calling, making me offers …
"This is not an old man's game and the transferable skills are limited so it is best to make sure you do well for yourself while you are trading. Suppose I could go back but only for a fixed salary of, say, 50k … Would I do that?
Trading is very much about performance, how well you do financially for the bank. This performance is partly reflected in your pay. Also, good traders make good money for the bank. It would be somewhat unbelievable if they weren't able to negotiate a good deal for themselves. Perhaps there's no other way, money talks. What would I do if I were a billionaire? I would keep on trading probably.
"My advice to people dealing with the financial sector is: never buy anything that's complex. Because the more complexity the more opportunities there are to screw you over. I just can't get my mind around how banks can still call clients in the corporate world and say, look we've got this great idea that's going to make you a lot of money. I mean, what are they thinking? Nobody in the City can be trusted because they don't work for you, they work for themselves.
"I do wonder why there seem to be so many somewhat dishonest people in the bank, and why the most dishonest are often the ones to walk away with the most money. I suppose that on the way to the top there's negative selection and most normal decent people conclude: this is not worth it or I am not doing this for money.
"The system feeds on itself and I don't see anything changing."
