We all knew this was not going to be a typical day before we even reached the trading floor. Absent were the usual back slapping ‘hey’s’ or ‘how’s the family’ questions, the normal tired, post commute, ‘I just need a coffee and a crueller’ conversations, shuffling through the line at the American Stock Exchange commissary that Monday morning. No, the noisy, collegial and sometimes locker room style banter was eerily missing and anyone who had come back from their posts, to grab some quick breakfast, those who knew, had creased brows and tight lips.
I remember one clerk rushing past me up the stairs saying, ‘Hold on to your fuckin’ hat, dude!’, as the coffee from the two cups he was clutching, splashed his blue trading jacket. But us clerks were always in a hurry, hell, it was written in black and white, right there in the job description.
Today, his was definitely a different kind of hurry.
He’d been a clerk for years, a one man show, deftly manning a phalanx of phones at his trading desk in the shadowed, second mezzanine level, where the scores of other phone clerks had a perfect, panoramic view of the entire trading floor. He was well regarded by his firm, all his floor brokers trusted him with their lives, a misunderstood or mistaken hand signal could cost them bigtime. My post was just below his, right in the middle of this sprawling, cavernous cave of a room and with two years under my belt, I was still a rookie in this fraternity of longtimers. He was always cool under pressure, always freon in his veins unflappable, normally.
Not this morning though, his eyes were buggin’ out of his head, doublestepping out of sight.
When I finally hit the floor, normally polite, dough bellied brokers whizzed by at speeds no one thought were possible, careening like pinballs off one another, unapologetically, fat hands and oversize pockets stuffed with trading slips, leaving criscrossing, hazy blue contrails in their wake, their bifocals exaggerating their own bugeyes. Yeah, we all had that ‘busy’ gear, the lightspeed adrenaline shot, that whooshed through our veins and hustled our pace when volume picked up, whenever the market decided to move. You didn’t survive very long if you didn’t and honestly, you didn’t survive very long if you didn’t love it, or learn to.
But whatever this was, I hadn’t seen before today. None of us had.
It was ninety minutes before the opening bell, I quickly found my trading jacket from a drawer, inside our round, fortlette of a trading post to head off to the DK room, where all the previous days’ trades were reconciled, or not. If there was a price, quantity or time disagreement we couldn’t resolve, us clerks would say,
‘Sorry, Don’t Know ya’, and off to arbitration usually went the trade.
That routine wasn’t happening this October morning, my boss Andy made that crystal clear,
‘No one leaves, fuck the DK room!’,
in a tone so deadly serious, so unlike him, it stopped us all dead in our tracks. Andy was the specialist, was awarded the rights to trade the options of Apple, Ford and a dozen or so other stocks. Tall and lanky, he was well liked, had a sterling reputation on the floor and was as good a boss as he was a market maker. He never ridiculed us when we made mistakes, he was more than generous with bonuses and we were the only post that had two women clerks. Dianne and Susan were given every opportunity to advance, and they did. They were the best clerks among us, by a long shot.
‘Hand me the buys.’,
The traders and the clerks, all hands on deck were standing with their backs turned away from the floor, heads down, hovering over the small work areas and all I kept hearing was,
‘Where are the buy orders?’,
‘Jesus Christ, where are the fucking buy orders!?’
It was normally the clerks’ pre market responsibility, the six of us Kevin, Diane, Susan, Jack, Mike and me to timestamp and match up the 4″x 5″, Buy or Sell paper trading slips, to what we had on the ‘Book’, the inventory of option orders our post specialized in. This morning, we were shoulder to crowded shoulder with all the traders, the market makers who we worked beside but the too few desktops were not designed for this many people, the design did not anticipate this many hands, reaching frantically for so much paper. It was if a small Bobcat had come along and plop…… emptied it’s load. There was paper everywhere. We were buried.
Being ‘buried’ was slang for getting swamped. We would need a new slang word after today.
The clock was glanced at out of habit, we prided ourselves on always being ready for the open, even on a normal day the adrenaline did a little number on your heartrate as you waited for the opening bell to ring. The brokers were still flying by, throwing the slips at us now, there were no ‘sorry’s’, there was no time. Trades were scattered in small piles at our feet, we all realized the bell was going to ring and there was just no way, no freakin’ way, we were going to be ready. The communal panic was palplable.
‘We’re so fucked!’
‘What are we gonna’ do!?’
‘Holy shit, these are all market orders for the open, what the hell!?’
Every so often we’d get a Buy or Sell market order at the open, they were mostly from small investors and they were usually the last to be filled, at the worst price of day. But the market orders that were piling up, that kept coming in and piling up, wave after wave, were not from any small investors, these were the Goldmans’, the Lehmans’ and the Morgan Stanleys’, the big money boys and they were all selling at the open, all begging to get out at any price.
I looked at Andy for a second, his head was bent slightly zeroing in, lazerlike at his screens. His perpetual tan had given way to a sickly grey, veins stretched across his thin skinned temple and his fingers were tapping away at a furious speed….clickety, clickety, clickety, clickety. Diane, a tough, wise ass, Brooklynite, the only clerk he trusted to trade when he was away from the post, was next to him trying in vain, to make sense of the piles of paper. Her mouth hung open as he said through lips so tight they didn’t move,
‘There are no fucking Buy orders.’
His voice was that of someone who suddenly divined his future, his fate was screaming at him in phosphorescent green digits.
“What?’, Dianne asked, her mouth still agape.
‘I said there are no buy orders.’
No one said a word, none of us clerks could quite wrap our panicked, adrenaline soaked brains around what that really meant to us, what our responsibility was when there were no buyers. The market makers knew exactly what he meant.
”Jesus, are you shittin’ me!?’
finally coming up for air, Palsie, the market maker I clerked for looked at Andy and all the blood drained from his face. They held their stare for what seemed like forever and then the bell rang, ding, ding, ding, ding, ding!
‘Feed me the orders, Palsie.’
and I did. Everyone was his pal, everyone was Palsie but I’d never seen him look any way but bloated and happy until this moment. I thought he was going to throw up all over me as he bought every sell order I handed him. So did Andy and all the other market makers at our post because that was their responsiblity, among others, to be the buyers of last resort. They made markets and were responsible for keeping an orderly market when things got busy and they all profited handsomely, most days.
Not on this day though, Monday, October 19 1987, the Dow would plunge 508 sickening points.
There was a huge outcry, an enormous expulsion of bottled up anxiety when the bell rang but shockingly, it didn’t last very long. It got quiet in a hurry and on a day like today, on a day we thought we were going to be in the shit until the closing bell, we weren’t. The sells were bought, the option prices adjusted accordingly and after a few hours we were finished with our work, the carnage was almost complete just after lunchtime. We all finally turned around and started to shake out our tensed muscles, began breathing again.
The trading floor was a ghost town, absolute dead quiet except for the occasional, quiet sobbing.
It stayed that way for the rest of the day as the Dow just continued to fall, eventually shedding over 22% of it’s value. No one said very much, a few expletives were heard, no one moved very much either except to glance up at the huge monitors scattered around the ceiling. It was the ugliest day anyone had ever experienced, even the longtimers were in shock and the alchohol started flowing well before the close, at the clubby restaurant downstairs.
There were a lot of traditions in this tribe and they were expected to be honored, you followed them if you wanted to fit in. It was acceptable to talk honestly about your losses but it was always considered bad form, to speak about your profits.
Palsie lost a third of his net worth that day, Andy closer to 40%.
Mike, the clerk who worked next to me was pretty animated that Black Monday, much more than usual. He was an odd bird, he was quick with the quotes and rarely made mistakes but he was a little off, never quite meshing with the tribe. Though we had that ‘otherness’ in common because I never really fit in either, he was hard to like. Mike didn’t say much, kept to himself and didn’t have much of a sense of humor either. I didn’t talk very much but I could always crack people up with my one liners. Humor was a valuable commodity on the floor and if you could make people laugh, you were golden.
Mike had a thick body and a very small head, slim, dry lips and beady eyes, and eyelids that seemed to be compressed by the gravitational pull of his heavy forehead, covered with a very small, toupee like mat of dirty, blond hair. He came in the next day and had a grin plastered on his face and as hard as he tried to contain it, he just couldn’t. Finally he fessed up, he had made a ton of money on options that Black Monday, a quarter of a million dollars to be exact, buying cheap, out of the money Puts, the further the market tanked, the more money he made. While Andy and Palsie were licking their wounds and tallying their losses, he announced a plan to buy a big, new house with his windfall.
Andy, seething a little asked him,
‘So… Mike, are you going to tell us how you knew the market would tank?’
‘Well, you know my brother works for Morgan Stanley, he called me Friday afternoon and told me Morgan would hit the market huge, with programmed sell orders on Monday morning. So I bought all the cheap Puts I could find, last Friday. Hey, they just wanted out.’
We stood there stunned, Mike had committed some cardinal sins and he either didn’t know it, or didn’t care because that grin never left his mug. Andy pounded his screen so hard, it’s hard to believe it didn’t blow up, told Dianne to watch the post and walked away.
After spending weeks trying to make sense of trades that didn’t, the piles of paper that landed in the DK room, Mike and I and hundreds of others were laid off. The DK room was ugly those few weeks, the last 2 words a trader, whose livelihood was on the line, wanted to hear was.
‘Sorry, Don’t Know ya.’