Welcome back to another exciting episode of Bucket Shop Mythbusters! On today’s episode, Adam and Jamie are going to real buyside and sellside trading desks in order to get to the bottom of some of this industry’s most infamous myths. Let’s get started!
I’m here at BYO McTavish And Sons Securities LLC, an actual sellside desk whose name we definitely didn’t just make up.
And I’m on the inside at FaceRip Capital, one of the world’s largest and most aggressive credit hedge funds.
Myth #1: “I’ll find a way to pay you next time.”
Adam, it appears one of the salesman here at BYO just did a trade with FaceRip. BYO worked for 6 months to get FaceRip out of a large illiquid position in a Serbian deepwater coal miner at a price of Par. The end buyer is an orphanage in Detroit who the salesman personally convinced that this was a safe investment. The salesman here told the FaceRip trader that we were locked on price on the inside and FaceRip improved his offer by 5 cents and fill or killed BYO to force the trade.
Wow, what a rookie move by that salesguy!
You’d be surprised how often it happens! Anyway, the salesman was initially upset but appears to feel a little better now that the trader has typed in the IB “sory man make it up on nxt one”. Now let’s get to the bottom of this myth Adam, is there any chance that happens?
Not a chance in hell Jamie! In the last 30 minutes alone the trader here at FaceRip has made the same promise to 6 different salesguys. In fact, our state-of-the-art MythBuster brainscan machine shows that he does not remember any of these promises within seconds of making them. Unlike his sellside counterpart, he’s allowed to lie and not go to jail.
That hardly seems fair!
I agree! Additionally, with modern regulation and compliance, if he ever knowingly gave back money to a sellside counterparty, he’d probably be fired.
I think we can consider that myth – BUSTED!
Myth #2: “I’m working for you.”
Jamie, right now it appears the FaceRip trader is engaged on a trade with his BYO salesguy. The FaceRip trader told his salesguy that he’d sell BYO bonds into their bid, but asked if BYO could do any better on price.
Wow, sounds like he really trusts his salesguy. And why shouldn’t he?
Right! It has been 10 minutes, and the BYO salesguy came back and said he was working as hard as he possibly could for FaceRip – moving heaven and earth – in an effort so Herculean that the ghost of Ace Greenberg himself appeared and shed a single tear in commemoration of this salesman’s amazing painstaking hustle. Alas, he said he was not able to do a penny better and they would have to do the trade at the price. Jamie, is there any truth to this saleman’s claim? Is th—
I’ll have to stop you right there Adam. Over the last 10 minutes, the BYO salesman vanished into the bathroom for 7, made himself a cup of coffee, and then injected an insulin shot into his beer belly while he was back sitting on the desk. Then he clipped his nails. I think it’s safe to say that to this salesman made no effort to improve his client’s price at all.
And why would he? The trader here never lets him make more than a quarter point anyway!
Myth – BUSTED!
Myth #3: “He’s my best friend.”
Adam, sorry to interrupt the show like this, but there is quite a commotion occurring here on the BYO trading floor! It appears the fight started when a new sales hire from Goldman Sachs has told FaceRip’s current sales coverage to “Say hi to Sully over at the ‘Rip for me, that guy really likes having a beer…. Hey – so anyway I’m probably gonna cover him once I get started up here.”
Oh wow Jamie, a comment like that is grounds for a full-blown sales dino turf war! What happened next?
Exactly what you’d imagine – it was like a scene from Jurrasic Park! The two got face to face and the salesguy started to roar, “Me and Sully go back fuckin’ years pal, I’m his kid’s fuckin godfadda!” to which the ex-GS salesguy said “Whoa, I was at Sully’s wedding – I’m his best friend!”
Sounds frightening Jamie, are you worried for your safety!?
Not at all Adam, high yield salesmen are the textbook definition of ‘all bark, no bite’. But more importantly, these are both very bold claims they have made. How can these two men – or for that matter ANY man – have such a close relationship with a client? Is there any truth to this myth?
Not at all Jamie. Everyone knows that buyside traders have no friends. In fact, they are hired solely on their ability to be emotionless trading robots, to hold us over until a time at which actual trading robots can replace them at a fraction of their cost.
You probably shouldn’t say that out loud!
Myth – BUSTED!
Thanks for watching! We’ll be back soon with another exciting episode of Bucket Shop MythBusters.