The following excerpt is taken from the new book “Life In The Pits: My Time As A Trader On The Rough-And-Tumble Exchange Floors,” by Brad Schaeffer (Post Hill Press, December 2023)
The Big Dog And The Fox
You have to work pretty hard to lose almost $7 billion in a week.
Brian Hunter managed to do just that. Although he was coldly indifferent to the devastation his activities had wrought, it was an agonizing experience for Amaranth’s remaining investors, such as county pension funds representing teachers and public servants and others far removed in both geography and understanding of what was happening to their quickly evaporating money. But, once again, as seems to be the mantra of the trading and brokering business, their pain was our gain. The day after Hunter flew back from a golf outing, for example, the hosting broker received a call calmly instructing him to sell tens of thousands of one-year-out strips of call options. And these phone calls and instant messages from Hunter and his assistants were going out all over the broker community. One broker was paid a million dollars in fees for one day’s work … somehow, even though the fund lost billions, they managed to scrape…