How This Journey Was Launched
- Posted by chicagosean
- on July 8th, 2012
I was in the process of dialing my 63rd cold call of the afternoon when my office buddy Jim dropped an issue of Forbes on my desk. “Dude, read the story in here about the ‘SOES Bandits’. Pretty cool. We gotta get into that.”
This was summer of 1997 and I was in the first months of my first job after graduating from College. Selling mutual funds and life insurance for MetLife. Awesome, right? Pfffffffffff.
To say that the story of a bunch of outsiders in Dallas printing money by taking advantage of slow market makers on the Nasdaq was eye-opening would be an understatement. But where could I do that in Buffalo, NY? Answer: nowhere.
Fast forward to Tampa, FL, spring of 1998. I quit MetLife and after my second job quickly closed up shop in Buffalo, I decided to move to Tampa and live rent free with my Dad while I figured out what to do next. I found a job working for what I thought was a “start-up stock brokerage” firm. What it really turned out to be was a hybrid pump-and-dump chop shop. We didn’t open client accounts like a traditional broker. What we did was promote stocks to other brokers, trying to get them to get their clients to buy the stock. Meanwhile, my company was being paid by the companies we were promoting in hard cash and stock options.
We bashed the phones all day long calling stock brokers all around the country, telling them tales of the latest companies we where promoting. Giving them all kinds of bullet points about why these (mostly penny) stocks were A STEAL at these prices and how they will be heroes when they make their clients rich on these stocks. Telling stories.
Meanwhile, the 8 or so of us who worked at this shop all became pretty tight (we were at WAR together!). And one of the guys was pretty interested in actual trading. He happened to discover somehow that there was a daytrading “arcade” operating a few buildings down the road from our office. While Kenny and I were having lunch at the mall food court one afternoon, he told me about it and suggested we pop in to see what the deal was. And so we did.
We walked into this office, unannounced, that had a room full of computer screens and about five or six guys in shorts and sandals banging away at the keys. We were ignored for what felt like 13 years until somebody finally emerged from around a corner and asked: “Can I help you?”
“Uh, yeah… we umm, heard you guys trade here. Or something. Are you guys hiring?”
“That’s not really how it works here, but hang on and I’ll introduce you to the guy in charge.”
We were eventually met by two friendly guys who appeared to be in charge. We chatted for a while as they explained what it is they do, how traders make money, etc. Of course, they lost me the minute they said: “Traders here aren’t employees, they are customers managing their own money. They open up an account with a minimum of $50,000.” Since I was struggling to pay for lunch in those days, this was obviously the end of this fantasy for me.
Nevertheless, after a 20 minute chat, they motioned us over to a row of computers that were set up with demo trading accounts: all the functionality of a real-live trading account, only fake money. They invited us to sit down and “play around”.
“This is a chart, which shows the price action of the stock. This is the level II box that shows you all the bids and offers for a stock. This is the buy button, this is the sell button. And this is where you can see the tally of your profits and losses. Play around for about 20 minutes and then we’ll come and check on you.”
After several miscues, Kenny and I started to get the hang of this, and by the time the guys came back to check on us we were both back to about breakeven. Nonetheless, we were hooked.
“Come back anytime, we’re happy to let you practice on the demo system.”
Well, as mentioned before, I had no money. But my friend Kenny did (his wife recently won a lawsuit related to a car accident). So he decided he was gonna do it. Every day for the next week we went back during our lunch break and “practiced” for about 30 minutes. Even though I knew I could never afford to get involved, I tagged along because it was something different to do during our lunch break and it was kinda fun. And even though it was fake, it was thrilling making $10K in 30 minutes each day. [the demo system was so easy to game, getting fills on stocks that were moving that you'd never actually get in real-life trading].
While Ken was in the process of filling out paper-work and moving money into his new trading account at this firm (a process that took a few days), the owner of the shop asked me: “Hey Sean, you seem pretty interested in this, how come you aren’t opening an account with us too?” I pulled out the wad of cash in my pocket (about five singles) and said “this is all the money I own.” He giggled and said he understood but no worries, come back anytime and bang away on the demo account while my buddy Ken was getting going on the real thing. And so I did.
Eventually, after another week of showing up every day, the shop owner invited me into his private office and said: “Sean, you seem like a smart guy, and you seem to be really interested in this. What if I told you I knew a guy that would put up the $50,000 for you to trade and you split any profits with him 50/50. Would that work for you?”
“I’ll start tomorrow.”
And that is how this Journey, nearly 14 years ago to this exact day (my birthday) was launched.
…And I’m still trying to figure out how to make consistent money.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Sean McLaughlin - Editorial, Curation, & Investor Relations Solutions at StockTwits. Also, former Member of the Chicago Board of Trade who trades his own account in Boulder, Colorado. More »
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