It had been a rough morning for Eric. The day before was the firms first day posting a trading loss in three fucking years. One fucking day in over thirteen hundred, but it still drove him mad. What irked him most, was that it wasn’t that they lacked any technical advantage over their competition. He had spent years making sure of that. They had vacuum tubes, collocated servers, the whole nine yards. No one on the market could place and remove quotes and trades faster. But the son of a bitch on the other end wasn’t trading faster, in fact, he was winning by being hundreds of times slower. Making trades entire seconds apart. Could it be that a human trader had somehow found a way to take advantage of their “dumb” algorithms? He made a mental note to check on their latest investment in machine learning capabilities, they might be needed sooner than anticipated.
The audacity of the tactic impressed him. Whoever was on the other end was risking real money to place the lure at prices his algorithms would try to bite. The trader launched pre-planned attacks of bids on Eric’s algorithms, so finely tuned that they had become predictable. When Eric noticed what was happening he immediately called their data analytics department to investigate, and the report, still warm from the printer now sat on his desk. It confirmed his suspicion. The data science guys came to the conclusion that an individual point and click trader in the UK was placing large order bids that their algorithms rushed to fulfill, but a timed mechanism would cancel the larger order before it was completed, baiting the algorithms into buying up his smaller intended orders along the way. The profits he collected by layering his trades in this manner were now exceeding Eric’s threshold for tolerance.
This was a dangerous development and it seriously threatened the firm’s, and more importantly his own, profitability. Eric pulled out his Moleskine pad and wrote a note to Joe Molluso, his boss who had brought him over to Virtu from JP Morgan. Eric then paper-clipped the handwritten memo to the report and set it aside. Joe would need to use his connections with the Commodity Futures Trading Commission to find this guy and shut him down. If word got out that people could exploit their automated trading systems… He didn’t want to think about it any further. He trusted Joe would put an end to the mess. The less he concerned himself with the fate of a single trader in Britain the easier he’d sleep at night. Just as he was putting this matter to rest, his secretary notified him he had a message from Rohan.
“Rohan?” Eric asked in disbelief.
“Yes, Eric. He told me you could return his call anytime today between 8 and 3 eastern, you want me to dial him?”
Eric figured it must be something important.
“Yeah, put on a DND for 15 minutes and patch him in.”
A couple minutes later a light flickered on his phone and he grabbed the receiver.
“Rohan, you son of a bitch. It’s been years.”
“I know, man, it’s been too long. I hear you’re working for Molluso over at Virtu. With Vincent Viola? Have you been in that hundred million dollar monstrosity of his? Read there’s a sixty seat theater in the basement.”
“Jesus, you don’t strike me as the type who reads the Daily,” Eric replied. His bosses’ obnoxious wealth was not something he cared to dwell on so he continued, “Not that you asked, but work is good, one day showing a loss in almost three years with the firm. It was yesterday, actually. So, of course you’d call today, eh? Impeccable timing as always.”
“Can’t win ‘em all, I guess. I, for one, am happy I caught you on a bad day. Figure you could use some good news to cheer you up. In fact, I’m calling to make you an offer.”
Eric had ceased to be impressed by Rohan’s irreverent manner long ago and gave a deadpan reply, “You can’t afford me Rohan. For pure entertainment value though, I’ll hear you out. I’ve got nothing on my calendar for another…” He looked at his vintage Speedmaster and said, “Another 12 minutes. So, tell me, what crazy scheme are you and Gavin getting into now?”
“Well, I’m sure you heard about Viktor.”
Eric nodded, though Rohan couldn’t see him.
“I only met him once but I liked the guy. A true loss to your… what would you call it? Community?”
“Yeah, sure. Something like that. Anyway, the reason I called is: we’re starting a hedge fund. Figure, might as well get it while the gettin’ is good. The Central Banks don’t show any signs of slowing down, there’s a fool’s fortune to be made out there.”
The ease with which the lie came out scared Rohan.
“You and Gavin starting a hedge fund? Is that a joke? Why on Earth would you want to bring that kind of scrutiny to whatever it is you guys are getting in to? I know better than to expect that to be the extent of the plan.”
Rohan explained to Eric the work Gavin had done to set up the world first hedge fund that had the architecture to invest in bitcoin. While a significant portion of the investment would be in cryptocurrencies, they wanted to have a traditional allocation as well, and for that they needed an experienced trader like Eric.
They discussed Eric’s current salary and Rohan was shocked to learn how little a firm with over a billion dollars in annual revenue and less than 150 employees could pay a senior trader.
“So what’s the fund called?”
Gavin and Rohan hadn’t actually decided on a name, but Rohan had to call it something so Eric didn’t think it was another one of their half-baked schemes. The idea for the name came from an anthology of stories Rohan had recently read called My Name is Legion, about a guy who worked to create a network of computers that the government intended to use to track all human activity, a means of complete economic totalitarianism. Having last second qualms about how his creation would be utilized, the protagonist purges himself from the database while retaining backdoor access to create identities as needed, giving him a unique position outside the system to do good deeds for profit.
“The fund is called Legion Financial.”
“Legion? Jesus, Rohan. That’s a tad morbid, no? Guess some things never change.”
Rohan replied wryly, “No, you’re right, some things don’t. You’re still a fucking asshole.”
They both shared a laugh before diving further into the details. Eric was a true agnostic, interested in any path that afforded him the greatest opportunity to complete his ascension to unreasonable prosperity. A bitcoin-trading hedge fund smelled like a deliriously profitable venture. The chance to head up his own trading desk was an added bonus. He didn’t want to seem overeager so he deferred.
“I’ll have to think about it. But wait, what the fuck do you even do at Legion?”
“I’m CEO,” Rohan waited for Eric’s disbelief to dissipate. He knew as well as Eric that Gavin would never let someone else hold the reins. “Before you blow a head gasket, Chief Ethics Officer, it’s part of our PR push, Gavin suggested we brand as an activist fund, publicize our trades to win public sentiment. It’s just another leg of the strategy outside of exposure to bitcoin.”
Eric shook his head, if there were two things he felt didn’t go together, it was activism and investing, but it was to be expected out of these particular friends of his. They never did anything without layering motives, just like that rogue trader he now would have to see crushed.