Stephen Frey - The Day Trader

For Lil, Christy, and Ash. I love you.

ACKNOWLEDGMENTS

So much help from so many.

Cynthia Manson, Peter Borland, and Gina Centrello. Stephen Watson, Kevin and Nancy Erdman, Andy and Chris Brusman, Gordon and Shannon Eadon, Bob and Allison Wieczorek, Matt and Kristin Malone, Scott Andrews, Marvin Bush, Pat and Terry Lynch, Baron Stewart, Bob Flanagan, Tony Brazley, Mark Tavani, Mike Pocalyko, Walter Frey, Alex Fisher, Jack Wallace, Stephen Palmer, Bart Begley, Marc Shaener, Monty Davison, Chris Tesoriero, Barbara Fertig, Mike Attara, Alex Bushman, Drexel, and Cody.

Im not a religious man, but I make the sign of the cross over my heart just in case. The way I do every time I start. After all, the next few seconds could change my life forever.

Employees arent supposed to use company Internet access for personal reasons, but lots of us violate the policy and no ones ever been fired for it. Jesus, they only pay me thirty-nine thousand dollars a year to be an assistant sales rep for retail paper products in the mid-Atlantic region. So the way I see it, I deserve a perk or two along the way. Ive dedicated eleven years to this company, but my wife and I still live paycheck to paycheck, even though she has a full-time job too.

Images flash across my computer screen, and I quickly reach the home page of the on-line brokerage firm I use to trade my small stock portfolio. As I enter the information required to access my account, adrenaline surges through me, like it always does when I get to this point. Its as if Ive bought a lotto ticket with a fifty-million-dollar jackpot, and I have that lucky feeling tingling in my veins.

Name: Augustus McKnight Password: Cardinal Account Number: YTP1699

My fingertips race across the keyboard as I close in on my target, and I pause for a sip of coffee and a deep breath. The deal is only a few screens away, and Im addicted to the anticipationso I prolong it. Its one of the few things I look forward to these days. This morning, as I guided my rusting Toyota through bumper-to-bumper northern Virginia traffic and thick summer humidity, I had a premonition that today would be different. That something was going to interrupt my daily grind. But Ive had that feeling before.

Theres a sharp knock and my eyes shift to the office doorway. Standing there is my boss, Russell Lake, vice president of all paper product sales. Russell is a slender man with thinning brown hair, a full mustache, and a pasty complexion. He leans into my cramped office, one hand on the doorknob, peering at me over wire-rimmed glasses. And I stare back like a boy caught digging in the cookie jar just before dinner.

Good morning, Augustus.

I can tell by the intensity in Russells eyes that hes trying to figure out what Im doing on my computer, but Ive positioned it so someone standing at the door cant see the screen. Hello, I say warily. You never know what hes up to.

Up with the eagles this morning?

What do you mean by that?

Its only eight oclock, he says sarcastically, tapping the cracked crystal face of the same Timex he wore the day he interviewed me more than a decade ago. Hes always been sarcastic. Thats just the way he is. Arent you usually crawling out of bed about now?

Im in by seven thirty almost every morning, sometimes earlier, but theres no point in arguing. Like most bosses, Russell has a convenient memory.

What are you working on? he asks.

Cold fusion.

Very funny, he says, moving into the office. Tell me the truth.

Im tempted to flick off the computer, but that would be a dead giveaway Im doing something wrong. Im updating a sales report for central Virginia, I say, hoping he doesnt walk around to my side of the desk. Nothing exciting.

Checking your stock portfolio again?

Russell blurs before me. What?

He settles into a chair on the other side of my desk, an annoying smile tickling the corners of his mouth. I know all about your day trading. He snickers. Youre on that computer at least two hours a day doing research, checking quotes, and placing orders. Russell removes his glasses and cleans the dirty lenses with his striped polyester tie. Im willing to look the other way at a little indiscretion, but sales in your region are way down. A couple of weeks ago senior management wanted to know what was going on. I defended you as basically a good employee, but I had to tell them about your stock market addiction.

Dammit, Russell! Whyd you screw me like that?

Dont blame me, Augustus, he replies coldly, replacing the lenses on his face. Youve got to start accepting accountability for your actions if you want to get anywhere around here. Thats always been a problem for you.

How do you know what Im doing on my computer?

I monitor the network.

So youve been spying on me?

Spying is such a nasty way to put it, Russell says. I prefer monitoring.

Youve been watching me without me knowing. Thats what it boils down to.

He raises his eyebrows and grins smugly. Now you know.

That sucks.

You shouldnt be using company property for personal reasons, he retorts.

Lots of other people do.

Other people get their work done on time. Besides, the company has a right to protect its assets.

And I have a right to protect my privacy.

Last year, you and everybody else around here signed a waiver permitting us to monitor your Internet activity, Russell reminds me, including e-mails. This shouldnt come as any surprise.

Now that he says something, I do remember signing that waiver. It didnt seem like a big deal at the time, but its come back to haunt me.

Are you day trading right now? Russell wants to know.

I hear a different tone in his voice. Theres curiosity as opposed to warning, with a hint of goodwill too. But Russell is skilled at convincing people hes reaching out when hes really digging, so I have to be careful.

Come on, he urges when I dont respond right away. Im interested.

Ive been caught red-handed, but if Im cooperative, maybe hell cut me a break. Im not actually day trading, I say cautiously. Real day traders execute hundreds of buy and sell orders every day. Im not doing that.

What are you doing?

Im buying a few shares here and there and holding them for the long term. My entire portfolio is worth less than a thousand bucks. I wont be retiring on it, but I get a kick out of knowing that when prices go up Ive made money without lifting a finger. Once in a while I get in and out within a couple of days, I add. But not very often.

So give me an example. Like what are you doing right now? he asks, gesturing at the screen.

Checking my account. Last night I e-mailed my on-line brokerage firm about an IPO theyre involved in.

An IPO?

An initial public offering, I say deliberately. Russell knows almost nothing about the stock market. Hes told me he puts most of his money in a bank account earning a boring four percent a year. He hates it when the market goes up and loves it when it dives. The companys stock is scheduled to begin trading on the Nasdaq at nine thirty this morning. I was checking my account to see if I had won any of its shares in a lottery my firm was running yesterday.

What do you mean, lottery?

Ive spent a lot of time over the past few years learning all I can about financial markets by reading the Wall Street Journal, studying business school textbooks Ive borrowed from my local public library, and doing research on the Internet. It feels good to show off a little of what Ive learned. The big brokerage houses sell shares of going-public companies to their preferred clients, I explain. Clients like insurance companies, mutual funds, pension funds, and a few rich individuals.

The haves, Russell sniffs. Hes from a working-class family, like me.