by P D Singer
“You’ve been keeping score?” One side of Ricky’s mouth twisted back.
“I know how much capital you control and what you’ve bought—I can do the math.” He could, too, but peeking was faster.
“Assuming that you’re right and I’m wrong, which everyone is, even though I’m not, how would you have me fix this?”
“Best case would be that you bought married puts when you bought the stock, but since you didn’t—”
“Back to that old monogamy thing again, huh?” Ricky interrupted.
“You know what that is!” Jon snapped. Ricky was too experienced a trader not to buy the stock at the same time as the options. Jon wouldn’t let him turn the subject.
“Yes, I know, but what I also know is that the stock would have to rise another couple of bucks before I’m in the black after I buy that.” Ricky voiced a more valid objection.
“Better than losing enough to buy a whole street of those houses Lasker builds,” Jon countered, “which is what you’ll do since you’ve married the position. You can buy the puts now, for some price that’s low enough to not crimp your profits, since you think a fall to that level is out of the question, or you could put a stop-loss order on, which will cost you a flat fee.”
“And even if it’s triggered, it may still be too late.” Ricky slid closer to Jon, who had no room to scoot away, trapped as he was against the desk.
“So buy the options. But do something.”
Ricky was too close now, and came to his feet, leaning on the arms of Jon’s chair, close enough to breathe into his ear. “I’ll buy the options if you’ll make mad passionate love to me on the couch right now.”
Jon wasn’t above breathing his response into Ricky’s ear, equally seductively. “You’ll buy the options because it will cover your ass, and I’m not making mad passionate love to you on the couch or anywhere else.” The heady scent of Ricky’s skin and his spicy cologne went straight to Jon’s groin—he had to force out those last few words.
“But you want me to do it, and you want to do it with me, and it will be wonderful; you still haven’t gotten your treat for Orewatt.” Ricky licked the shell of Jon’s ear, mixing his “its” with wild abandon and exhaling a warm caress.
“You need to hedge your position no matter what, and I’m not meeting you on the couch.” The couch was down the hall, he and Ricky were here behind a closed door….
“But I was monogamous again last night,” Ricky murmured.
“Accidentally or on purpose?” Jon couldn’t help asking.
“Accidentally on purpose.” Ricky kissed the edge of Jon’s ear again. “I was looking at a naked woman instead.”
“What!” That shock broke the spell, letting Jon think with his larger head again.
Ricky sat back down on the chair, grinning at his own joke. “I was at a life drawing class, looking at some model and trying to get the curves on her shoulders right. Nothing sexy. Want to see the drawings?”
“And you didn’t go home with one of the other artists?” This did not match the Ricky Jon knew.
“Straight, straight, woman, gay, gay, but they were partners, woman, ugly, straight, and already did and didn’t want to do it again.” Ricky totted off imaginary people with one finger tapping in the air in a circle around the equally imaginary model.
With every word Jon’s jaw dropped a little farther, even though Ricky’s expression told him something was off about this recitation.
“I did nothing but talk with anyone there, but you wouldn’t have believed me if I’d just said no.” Ricky took Jon’s hand, holding it in both of his.
“Yeah, well, it was only Monday, the week is young. Don’t mix business with personal here, Ricky; we really aren’t seeing each other anymore.” Jon took his hand back. “Just because I let wishing get in the way for a minute, don’t think that’s changed.”
“What else hasn’t changed is that we’re still at odds about how to reconcile positions. We’ve talked about how to cover my ass, but we haven’t talked about how to cover yours, and you’re hanging three million bucks out in the wind.” Ricky snapped back into total trader, all hints of his enticing manner gone. This Jon could deal with more effectively.
“I have six months to find out whether I have three million bucks of expired options, and that still leaves me two million ahead from my last trade. Even if those lenders don’t drop as far as my lowest price, I’ll make money.” The legal pad that his elbow rested on had all the figures—Jon thrust it at Ricky. “I know exactly what those options will be worth at every step down.”
Ricky gave both Jon and the pad a slit-eyed glare but then stopped to study the numbers. “All very tidy, but what if they don’t go down?” The respect in his voice was tinged with doubt.
“Two quarters of earnings statements will come out before the options expire. The damages will be anywhere from minus three million to plus nineteen million.” Jon ran his finger down the far right column. “I may have a loss, though I doubt it, but I won’t blow up—I’m not risking more than I can afford to lose.”
“Edgar won’t forgive it easily, though,” Ricky pointed out.
“He won’t have anything to forgive.” Jon jerked a thumb at the piles of paper all over the table. “It’s coming, and the only question is when. Make your money and get out, and I’ll make mine and get out, and the only difference is that I know what my timeframe is. At worst I’ll have jumped too soon and have to do it again.”
“If you can.” Ricky rose to his full height. “I’ll take care of the stop-loss orders, but not because I think it’s necessary,” he said from the open doorway. “Lasker and WideWest are both up.”
“For now,” Jon told him.
THE office door stayed shut—Jon had no desire for Dwight’s company and nothing he wished to consult about. He could look at stacks of data on builders without his chubby little shadow for a few hours.
When he finally emerged, he saw that Dwight had found something to either work on or entertain himself with, possibly both. He stood before the whiteboard on the wall, gesturing and adding symbols, saying something that Jon would have to get closer to hear.
Dr. Iggy, armed with his own marker, added his two cents’ worth while looking up at Dwight, who was a head taller and quite a bit wider. Whatever the item under discussion was, Iggy was delighted by the argument; his was the face of a man enjoying himself. “Convert to P1 and P2,” he suggested, scribbling into the nest of letters and numbers on the whiteboard.
“That works if it’s a Gaussian distribution,” Dwight argued. “It doesn’t have to be.”
“What are you two trying to accomplish?” Jon paused behind them. They turned around with a start. They’d been at this a while, judging from the scrawls and smudges. Long enough to rub away part of their work and transfer a smudge of green dry-erase pigment to Dwight’s nose, the only flaw in today’s well-groomed and crisply ironed appearance.
“Trying to work out the square root of n, which is the number of observations, and deciding if that will improve confidence in the estimations,” Dwight explained.
“It won’t, but the math seems to amuse him,” Dr. Iggy added.
“Quit channeling Karl Popper and assume the market goes from low volume to high volume,” Dwight commanded. They turned back to the whiteboard, and Jon left them to their discussion. He was on his way to find out if Ben Fleisher had any confidence in Jon’s estimations.
The ankle-deep plush carpet and the furniture-polish scent from the walnut paneling in the financial advisor’s office took Jon right back to his youth and his first encounter with the reality of the money he’d been born with. Ten years old, he’d tried to wrap his mind around the sums that Mr. Fleisher showed him on the ledger, tried to translate that to buying power in terms of the model sailboats and candy bars that were his biggest desires at the time, and failed utterly. Close to twenty-five years later, Jon knew he’d be shown much larger numbers, but his wants had grown even mor
e.
The art on the walls had been rotated again; Jon stopped to gaze at the Cezanne landscape on his way across the room. Last time he was here, he’d admired a Goya portrait, the time before, a Picasso lithograph. The collection grew a few at a time, at odd intervals. Fleisher had acquired the Picasso after the market crash of 1987, the Goya, which had hung on a wall at LTCM, in 1998, and a Monet that Jon found very restful but that he hadn’t seen in a while, after the events of 9/11. The Cezanne had been auctioned off by the Resolution Trust Corporation in the course of liquidating a savings and loan; the French court scene in Jon’s living room had come from that collection, purchased on Fleisher’s recommendation. Some of his trust fund assets Jon was allowed to control directly.
The painting reassured Jon that Ben would listen. This was a man who had the wherewithal to purchase when everyone else was selling.
Fleisher greeted him with a firm handshake and a hand on Jon’s elbow. “So, Jon, ready to take control of your assets?”
“Isn’t that what I’ve been groomed to do my whole life?” Jon could ask that knowing the answer; he’d liked and trusted this man enough to take his guidance regarding classes and reading material even when the same advice from his parents would have sent him into a fit of rebellion. Fleisher had told Jon rather than asked him what his trust fund would carry, but their conversations had ranged over more than money.
“I’d say so.” He waved them to the tufted leather couch rather than the chairs by the big walnut desk and handed Jon a sheaf of paperwork. “This is what you have at the moment. I have to say, those last few suggestions of yours turned out quite well.”
Flipping the pages one by one, Jon nodded. “I feel like some sort of vulture. My recommendations are usually ‘don’t buy that, get rid of this’. Or ‘short the other’.”
“All legitimate ways to make or preserve capital, though I don’t often short anything, even on your advice.” Fleisher pointed out numbers on a sheet that had been one of Jon’s rare positive recommendations. “I’ll let you cowboys at the hedge funds do the riskier trading.”
“I’m hardly a cowboy.” Jon thought he was rather conservative for his end of the industry.
“Does that mean you’re finally ready to join us here? I find myself in need of another trust officer.” He followed that offer with another enticement. “You’d be trading.”
Whipping around in his surprise, Jon realized his advisor was quite serious, and there was a time when he would have welcomed that offer. But now, to buy blue chips and never set the kind of money trap he’d laid with his purchases yesterday? “Thank you, but I might be just enough of a cowboy not to fit in here.”
“I had to ask, Jon.” Fleisher patted his shoulder. “I imagine we aren’t terribly exciting compared to your hedge fund.” Nothing Jon could say to that would be quite right, so he thanked Fleisher again and went back to leafing through the printout.
Jon paused in his flipping and scowled. “Here’s one to kiss goodbye, Mr. Fleisher.”
“I think you can call me ‘Ben’ at this point.” Tilting his head quizzically, he asked, “What’s the offending asset?”
“This.” Jon showed Ben the page, barely recognizing the promotion he’d been given in the face of discovering how much of his net worth was invested in a financial institution with far too much exposure to looming disaster. “Since I want cash on hand, that’s one that gets liquidated.”
“That’s a good, solid firm.” Fleisher perched some reading glasses on his nose and scrutinized the numbers on the page.
“Not as solid as you’d think….”
They talked late into the afternoon.
“YOU too?” Danielle asked. “Why didn’t you buy in with Jon?”
“I didn’t decide until just now that I wanted any at all.” Ricky still didn’t want put options and was looking to keep his expenses down. “What do you mean, forty is gonna cost me two points?”
“Yeah, forty is going to cost you two. Thirty-five is going to cost you one and a half.” Danielle wasn’t going to budge and probably didn’t have much wiggle room other than in the commission.
“What did Jon get?” Damned if he was going to blow much of his profit on something as unnecessary as this.
“Twenty-fives at sixty-five cents. You want to go lower? He did.” Ricky could hear shouting and telephones ringing on Danielle’s end of the call.
Tapping his pen impatiently against his desk, Ricky hesitated a moment. “No.” He had no desire to forfeit sixty-five thousand bucks of profit, but he knew he’d have to cover the position somehow now that Edgar was aware of the lack. He could say with perfect sincerity that he’d hedged the position, and besides, he wouldn’t still own the stock if it dropped to that level, although he could see making some money back if it did. This really was the stupidest idea Jon had cooked up in a long time: it wasn’t as if Ricky was any more faithful to his stock positions than to… Jon. “Do me a thousand, okay?” That covered his hundred thousand shares.
Should he take the other side of this hedge to another outfit? “And a thousand of Lasker Builders at 20 will run me what?” Too much effort to make another call for something he didn’t want anyway.
“You can have that for thirty-five cents.”
“Do it.”
“Coming up.”
Ricky filled out the forms himself, not wanting Logan to see that he’d caved, and cursing Jon for costing him a hundred grand.
Chapter Twenty-Two
JON’S cell phone vibrated against his thigh, making him jump. He dropped the 10Q on the desk and answered.
“I have to cancel tonight, Jon; the boss needs me to stay and get this section worked out so we can get it to the engineers.” Davis sounded both angry and apologetic. “It’s going to keep me too late for our plans, but I could swing by with some takeout?”
Tapping his fingers against the desk, Jon wondered if he was ever going to sample the food at Allegra. “I recorded the ball game; we could watch it.”
“Sounds good.”
After he’d adjusted his expectations, Jon had to agree that lo mein and the Yankees with Davis sounded fine. Some lucky person would be able to get a table at short notice at the trendy restaurant and think himself quite the man.
IT WASN’T as if he was stalking Jon, Ricky told himself, retucking his shirt and adjusting the hang of his suit coat. He was no stranger to the city’s hot spots, with or without Jon; why shouldn’t he have dinner at Allegra, just coincidentally on Wednesday night?
Ricky kept an eye out for Jon and clucked over the man’s appearance when he finally locked his office door. The maître d’ was not going to let him in with his tie hanging loose like that, and Jon really needed to comb his hair—looked like he’d fluffed it with his fingers half a dozen times but only on one side. Ricky allowed another twenty minutes’ head start before he went downstairs.
Nothing so gauche as a line formed outside the restaurant: Ricky left the cab and swung though the brass and etched-glass doors. “I’ll wait for the rest of my party in the bar,” he told the maître d’ after scanning the open room for blond heads, none of which belonged to his targets. “They’ll be along shortly.”
Half a vodka martini later, Ricky concluded that Jon had gone home to change, and halfway down the second began to wonder if Jon had lied to him. He swirled the ice around in the glass, and when he looked up again, he saw a familiar man of medium build and straight dark-blond hair being seated at one of the white linen-covered tables. The man waved, and Ricky ambled over to greet him.
“Fancy meeting you here, Brody.” Ricky saluted with his drink. It had been about a year, and the memory of the last time was enough to make Ricky willing to sit down when invited. Let Jon see that he wasn’t the only one with a good-looking companion, and now Ricky had two. Brody introduced his companion, who was certainly worth looking at, an Asian man with sensual lips, dressed in tailoring as fine as Ricky’s own.
“Been stood up?” B
rody’s mathematically straight teeth glinted in the light of the small oil lamp on the table.
“I’ve never been stood up in my life.” Ricky had been looking over Brody’s shoulder at the door. “I have been known to change dinner companions.” He downed the rest of the martini in one gulp. “I’ll have the roasted monkfish and another of these.” Ricky decided he’d make more of an impression on Jon, and on his companions, if he devoted some effort to being charming.
By the end of the excellent meal, Ricky’s replies had dwindled to monosyllables and he’d eaten with little attention to the subtle and exotic flavors. Barely aware of the undercurrents passing between his companions, he tormented himself wondering where Jon was, who he was with, as if Ricky didn’t know—damn Davis for a poacher!—and what they were doing.
“I said, Ricky—” Brody interrupted his thought. “Are you coming home with us? Your conversation hasn’t been up to par; you owe us something better from that mouth.”
Two weeks ago he would have said yes. Two weeks ago Brody wouldn’t have said it—Ricky would have been sparkling and the one to suggest a change of venue. Now he was on his feet, pulling cash from his slender Italian leather wallet. Two hundred-dollar bills fluttered to the white linen, more than enough for his dinner. “I owe you nothing.”
All the way home, Ricky thought about what he owed Jon.
TRUE to his word, Davis appeared late in the evening with a paper bag in hand. “I ordered for two, but there’s a lot. Are we feeding Ricky?” He set his bounty down on the counter while Jon produced plates and forks.
“No.” Jon investigated the cartons and didn’t elaborate. “Mongolian beef, mmm, General Tso’s chicken, also mmm.”
“Thought I remembered what you liked.” Davis piled his plate with rice, meat, and vegetables. “Skipped the sweet and sour pork.”