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HEDGER. Part 2. TRADING ALLIANCE (about greed and betrayal).

Sunset Boulevard is one of the most iconic places in Los Angeles. The unremarkable street starts downtown and stretches westwards. The street gets wider, the houses on either side of it get taller and in Hollywood, it is already a boulevard, with shops, hotels, eateries on both sides, crowds of tourists, and endless traffic in both directions. The boulevard rushes further west, Hollywood smoothly passes into Beverly Hills and at the junction of these two areas of the metropolis a piece of boulevard in one mile is called Sunset Plaza. It is a favorite spot for movie stars and celebrities. On the Hollywood hills overhanging this slice of Hollywood are their homes and villas, here they spend time in restaurants and nightclubs, and here expensive boutiques are open for them. Here is their hangout and business meeting place.

It was a hot afternoon, scorching hot. Jack sat in the shade on the restaurant’s empty veranda, sipping iced coffee. Bikers on their Harleys broke the silence. They rode slowly, showing off their chrome-plated steeds and leather gear to passersby. Tourists snapped their cameras. Jack smiled as he watched it all. He thought of the people he had once trusted. The manager who had absconded with the money, the owner of the brokerage firm with his clowns, and the owner of another circus called “The Institute” who swindled people and openly disregarded the law – they were all foreigners and crooks from the East. Who induced them to go across the ocean to the richest Christian country in the world to defraud its naïve citizens? Why don’t they go to neighboring Saudi Arabia or the Emirates, where money is abundant? Maybe because the same crooks live there? In America, they settle in Los Angeles or New York. Big cities are easier to hide in, the smartest lawyers work there, and they are bought there. None of the aliens open their dodgy business in Midwestern towns or Texas, where the residents carry guns and won’t hesitate to poke holes in anyone who tries to scam them. So why is the investment industry opening its doors to these scammers who swarm here like flies to a known substance? Could it be because the industry loves the scammers who feed it?

Burdened with such unhappy thoughts, Jack drank coffee, smoked a cigar, and thought about going back to what he had learned – the real game of the financial market. But it didn’t get any further than thoughts. A figure appeared at his table. And asked permission to join.

He called himself Andy. He said he knew Jack, had once decided to take his trading course, and had even read his book, but the company had suddenly disappeared. His accent made him sound like a foreigner and Jack asked him where in America he was from. Andy said he had been born in the USSR and brought to America by his parents as part of the Jewish resettlement program. He added that he had learned skills in computer programming courses here and could translate Jack’s textbook into computer language.
“The course on a compact disc can be sold much more successfully than the book,” he exhaled and looked at Jack expectantly.

Jack remained silent, smoking his cigar. He had just been reflecting on the sad experience of working with those who came to America from a world of different moral values, and here was another such alien offering his services. However, the practical nature of the guest appealed to Jack and he nodded: “The offer is interesting. You may get some coffee, and let’s talk” .

When Andy returned with the coffee, Jack asked him with a smile:
“Listen, pal, before we discuss the possibility of working together, I need to explain something to you. You’re offering your help to a man who has had the unfortunate experience of dealing with bad people, who many good people have called all sorts of names and wanted to punch in the face. I’m tired of the negativity, so would you mind if we set the record straight?”
Andy nodded in agreement.

“Good. I have studied the science of the trading game, devoted ten years of my life to it,” Jack continued, “and I aspire to become a successful pro. But technical knowledge of the game is not enough, and my training is far from complete. I need to learn how to stay ahead of whoever is on the other side of the screen. Or, in the words of the cowboy, to be successful, you have to learn to be the first to pull the trigger. The secrets of this lie in psychology, and I can excel in trading if I learn to anticipate the intentions of those who want to deceive me. I haven’t been able to do that yet,” Jack looked at his guest expectantly.

Andy didn’t get the hint, so Jack continued:
“One of the key problems in partnership is the difference in cultures, religions, morals, traditions, and all those things called nurturing environments. For example, one morality says, ‘You shouldn’t kill,’ ‘You shouldn’t covet another man’s wife.’ And others have morals that say, “You shall not kill your own, you shall not steal from your own.” So for these others, religion seems to forbid bad actions, but with a caveat. And if it also inculcates in its flock superiority over others, it is already chauvinism and other nonsense. This is where the main problem in relationships lies, and those who do not pay attention to this fall into the trap. A person with pure thoughts, shaking the outstretched hand of a smiling stranger, does not expect to be stabbed with a knife in the back. But precisely because he doesn’t expect it, he’ll get it one day!”
Andy listened, tapping his fingers nervously on his cup.

“OK, I’ll give you an example,” Jack put aside his extinguished cigar, “we know from history that the English have Germanic roots. In the fifth century AD, Germanic tribes of Saxons crossed the Channel and settled on the islands of England, Scotland, and Ireland, next to the indigenous Celts. Gradually, under the influence of the environment, their language and traditions changed and the Saxons became Anglo-Saxons. Dozens of centuries have passed and almost no trace of the settlers’ former heritage remains; few Englishmen know that their long line of ancestors had Germanic roots. But the pedantry and industriousness inherent in the Germanic race have been passed on to their northern descendants at the genetic level, that is, unconsciously.
And here is an example with America, for comparison. It is now home to Anglo-Saxon descendants and those whose ancestors belonged to a completely different culture. They communicate in the same language, observe the postulates of Christian morality, and respect the law. And although modern Americans have ancestors who lived on different continents and practiced different cultures, no one organizes African or Asian dances in the squares, and everyone goes to the office in civilized clothes and ties. They have agreed to live together in peace and friendship. That is the uniqueness of America. But, at home, some Americans dance to drums, speak the language of their ancestors, and have their own culinary preferences. There is also an aggressive heritage that manifests itself in domestic disputes or fights with neighbors. And to stay in their ancestral environment, all ethnic groups live in their communities. Their residential areas are not separated from their neighbors by barbed wire, but behind invisible barriers racism has its color and hides in everyone’s skull. It’s a similar story in the country you come from, where two dozen Asian tribes live the heritage of their ancestors, but all called themselves Russian.

“And I guess because they’re strangers to each other, inter-ethnic crime is off the charts?” Andy smiled.
“Exactly,” Jack nodded, “America is almost the exception here, but only America. Ethnic groups living in other countries will never get along. Take Sweden, Denmark, Holland, Belgium. These countries were settled by one ethnicity and they maintain traditions of common Viking ancestors. Crime was so low there until recently that they abolished their prisons. But now their governments have opened the borders to immigrants from other countries. Many of them came from the feudal nightmare of the Middle Ages. The migrants not only brought crime with them but began to impose their traditions and way of life on the native population. And the quiet life of Western Europe was over. Prisons were reopened. Shortsighted politicians are to blame,” shook his head Jack.
“Disagreements lead to inevitable conflicts, which are prevented from being resolved by the religious prejudices of the parties,” he continued, “for example, someone who has even a quarter of Jewish blood is proud of his Jewishness because from birth he has been brought up in the atmosphere of prejudice of that very quarter, which whispers to him about his choosiness. There are negative consequences to business associating with that kind of person, and I’ve been caught more than once.” Here Jack paused and looked straight at Andy.

Andy was embarrassed and mumbled that his mother was Ukrainian and their family wasn’t religious.

“There, young man, you’re beginning to understand me at last,” Jack smiled, “and you’re spoilt, not by a quarter, but by a whole half. The consequences of working with such ‘chosen ones’ have been sad for me, so I’m sorry.”

Andy recovered from his embarrassment:
“Look, Jack, what about university life, the socializing, everyone spending time in the same places, having fun together, speaking the same language, getting used to having the same interests…?”

Jack grinned and shook his head:
“Andy, you are following the delusions of politicians. They believe that education can bridge the racial divide. I don’t believe the politicians on anything, and I don’t believe that either. Sociologists and psychologists know human nature better than politicians and, unlike them, they tell the truth. So, sociologists see in the sign of equality invented by politicians a sad illusion of reason. And they cite many examples to prove their point. They agree that an education received in, say, England, can make an immigrant of any race a Bachelor of Science. Society allows an immigrant to get a degree. But for a homo sapiens of a different color, with a different morality, culture, and customs to think and act like an Anglo-Saxon, his descendants will need at least a thousand years of living in an Anglo-Saxon social climate. That’s how long it would take them to change their way of thinking and possibly the genetics of their offspring, should such a person choose to enter into a mixed marriage.”

Andy was silent. Then he played his last card:
“Jack, I know people with money. If we become partners, I’ll bring them to you.”

He hit the mark, and Jack reflected. His dream of returning to exchange trading was taking shape.
***

NEW PARTNERS.

They rented an office in the business district of Studio City, brought in computers, and got to work. Jack was rewriting his book for the commodities and futures markets, and Andy translated it into computer language. Jack quickly learned the elements of programming and things went faster. After several months of hard work, the course was ready. It contained three hundred slides with animation, and the whole learning process was presented in the form of a film, watching which one could return to any slide to consolidate the knowledge gained. The training included techniques for working with stock charts, strategy selection, methods of working with indicators and oscillators, as well as their combinations for different strategies and tactics. The course included practical recommendations on managing and multiplying capital and offered strategies and techniques proven by Jack in practice. And most importantly – the course gave visual instructions on how to act in this or that situation to avoid mistakes that all newcomers make. A novice who received this knowledge could control his emotions, and this is a trap for all beginners.
There was also a section of the course that included homework on market analysis for strategy selection, examples, and features of tactics for rising and falling markets. Jack supported this part of the course with two months of online and telephone sessions, after which the beginner was ready to sail on his own, knowing all the reefs and shoals in his path.

The course was a 21st-century novelty, a visual learning tool in which Jack put all his ideas and experience. At the time, Larry Page and Sergey Brin were developing their search engine, Google. Mark Zuckerberg, Eduardo Saverin, Andrew McCollum, Chris Hughes, and Dustin Moskovitz were still schoolchildren and had no idea that five years later, as university students, they would create the global social network Facebook and become very rich people.
No one had ever offered a course for traders like the one Jack created, and he patented his invention in the Library of Congress. In gratitude for his help, Jack included Andy as a co-author. Someday he would regret it, but that would come later.

Now that the training course was on a compact disc, they could start selling it. Jack realized that since the course contained additional customer training, the online sessions would take up his time during trades, which was incompatible with his job as a trader. He also realized that he would have to become an administrator, hire and train staff, rent space, and possibly open branches in other states. In addition, he would have to work with brokers, think about advertising, and pay for lawyers to fend off competitors and envious people who would want to eat his business. Such is the fate of any business that relies on fame and big dividends.

Jack realized that he couldn’t run such a project alone. His partner Andy was a technical assistant and his knowledge of the specifics of trading games was zero. Jack decided to start by getting the course recognized in the industry. To do this he needed a Commodity Trading Advisor (CTA) license. Such a license entitled him to membership in the National Futures Association, and that was the back door to the casino, the staff entrance. As Jack already had a license to operate in the commodities and futures markets, he easily obtained this second CTA license.

The National Futures Association’s website allows brokers and investors to check the track record of advisers and the services they offer. Clients can also find out about the CTA’s trading skills, experience, and reputation in the industry.
And Jack’s office started to get calls. Individuals were calling, interested in the training course whose presentation was posted on the website. There were calls from brokerage firms in Chicago and New York and calls from Canada. Brokers were interested in working together. They quickly realized that such an unusual course would bring them new clients.

The partners priced their course at $6,000, which also included 2 months of online training. Clients liked the novelty of the course because of the amount of information and service provided. The business starts working. Jack began to attract investors and soon went back to trading. He entrusted Andy with all the production, marketing, and sales of the training CD.

Jack now combined his work as a trader with teaching newcomers. Unlike the Forex market, where following currency movements around the clock was exhausting, the US commodities markets offer to play in the morning hours until noon. But there was a problem with clients who had bought the course. They were asking for morning sessions. Jack needed a strategy when trading was not time-consuming. The idea came to him at midnight and he stayed up the rest of the night.

Jack liked indices of all the instruments in the commodities and futures markets. These markets are characterized by crazy liquidity. Price dynamics are created by the biggest companies and banks, as well as hundreds of thousands of ordinary traders worldwide. Jack found a correlation he already knew in the behavior of some indices. Watching these markets on screen, he saw in price movements all the passions, vices, greed, and fear of the participants. Jack smiled, these passions were described in his book.

The price movement of liquid markets draws familiar shapes to traders: ‘Head & Shoulders’, ‘Double Top’, and others. The appearance of these shapes on the chart reflects the passions of the players, and for a time makes market behavior predictable. At such times, the sharks of the market gambling know what to expect and prepare to throw millions of dollars into the game. They do so to provoke a jump in the price in the desired direction, and to take money from those who hope to beat the cheats.

Jack realized that he had to exploit the sharks’ game, enter the trade at the moment of the spike they had provoked, take his prey, and run away with it. As Jack developed the idea of instant deals, he focused on one key tool. This tool is a strength or volume indicator that reflects the tension in the market when the sharks’ injection of money causes prices to jump in a matter of seconds. This usually happens in the first few minutes of an open trading session. That’s when the money is taken from those who weren’t prepared.
Jack sipped his coffee and smiled. The strategy had been chosen and his brain was already working out the entry and exit tactics.

***

SNEAKY.


On Monday, Jack arrived at the office later than usual. Andy was wandering around. His hair was disheveled, his eyes bulging, he’d been up all night.
“Something wrong, mate?” Jack slumped into his chair.
“I’ve lost a lot of our client’s money, Jack,” Andy murmured, “he opened an account for fifty thousand and gave us the password to manage it. It’s one of my acquaintances I told you about, a wealthy man from Russia. I should have given you the password, but I couldn’t resist, I thought I could do it like you. I lost ten thousand of his money…”
Andy clasped his head in his hands.

Jack was silent. He knew exactly how it happened, he had seen dozens of losers like this over the years. All victims of their emotions.
“Andy, you haven’t just lost your client’s money,” Jack finally said, “you’ve jeopardized the reputation of our firm, my license as a trading adviser, and my membership of the Association. Do you realize what you’ve done?”
Andy looked pitiful.

“You assured me of your loyalty to our business, but you acted behind my back like that wife who keeps loyalty to her husband only because of circumstances,” Jack grinned.
He lit a cigar and took a bottle of whisky from a drawer:
“OK, let’s put emotions aside. Have a drink and we’ll decide how to make up for what you’ve done,” he slid the glass over to Andy.

“I will try to recover the loss on your friend’s account. But it’ll take two or three months. And I won’t charge him a cent in commission,” Jack continued, “although it’s murky because this client didn’t have time to sign a contract and risk agreement with us. Without that, we had no right to put his account into play. You need to negotiate with your friend so that he doesn’t cause a scandal. If you can’t, bring him here and I’ll talk to him myself.

“You’re not a trader, Andy, do you understand?” Jack’s face grew serious, “You’re here to help me with technical matters and you’re not to touch anything outside your area of expertise. When I met you, you promised to bring investors with money into the company. You started to lead them to the wrong door, boy.”

It was raining and Jack opened the window, exposing his face to the drops.

***’

ROBOT.


The exchange trading was entering the era of computer technology, new products were appearing every day and traders already had access to electronic platforms that allowed them to open and close trades in seconds at the touch of a button.
One day Jack’s former student walked into the office. The guy had brains, and now he was proposing the idea of an automatic system that could predict the movement of the price sine wave and recommend entry and exit points for a trade. The automatic system was based on the principle of repetition, all it had to do was input into the robot’s memory
a database of prices in a particular market over several years.

Jack liked the idea. An automated trading system seemed like a real mechanism that could greatly simplify the whole process. He asked the Association for the last five years of index data and soon received it. Andy recruited a fellow programmer to create the automated system and they set to work. Soon the robot was ready. There was a problem with entering the previous day’s data, which had to be done manually at the end of the trading day. In addition, the robot did not take into account changing market dynamics, and positions for the next day’s protective stop orders had to be determined based on general market analysis, including news.
They stayed in the office late into the evenings, but soon the robot’s tests showed surprisingly good results – forecasting accuracy was over 70 percent.

After several weeks of successful real trades, Jack offered to a Canadian brokerage firm buy the signal. The Canadians tested the system for about a month and bought the service for their investors. After a series of successful trades, the system began to fail.
The signals to enter a trade were accurate, but price spikes began to hit the protective stop orders with enviable regularity. Jack knew from experience that this was the work of the market sharks, who were after the players’ money and were rocking the market to get at the protective stop orders. Jack knew that the market makers saw open positions as well as stop orders. The exchange is a partner of banks and corporations, they have a common interest in making money by taking it away from other participants.

The reason for the failure of the automatic system became clear to Jack when he learned that brokers from Canada had hooked more than a hundred investors on the signal. Market makers began to see a hundred orders at the same price level to open and close positions, as well as the same number of protective orders. This indicated that someone was using the system.
Market makers on the exchange have an indicator that no other participant has. This indicator is called “open interest” and is effective when used in conjunction with the “volume” indicator.
However, the volume indicator shows the saturation of the market with players’ money and is available to all participants. But the second indicator, which shows the number of open positions, is available only to market-makers. This indicator helps the exchange to function like a casino, where only the owner of the casino should win. When market-makers figured out Jack’s system, they applied their method of disarming it.
Jack learned that the automatic system did not work for a large number of customers. It gave good results for a few orders but became unprofitable for a hundred users and was already working to destroy the reputation of its creator. Canadians refused to buy the signal.
The fiasco with the automated system convinced Jack once again that the most successful strategy can only be an instant trading strategy. You enter a trade for a few minutes, catch your prey, and exit quickly. Without giving any chance for the market maker to figure out your game.

***

THE MAGIC SIDEWAYS MARKET.


Having switched from currency markets to American commodity markets, Jack first tried his hand at futures. But he soon abandoned this activity in favor of long-term investing. The same was true for illiquid commodity markets, where prices fluctuate when the weather changes or politicians play games. Jack favored dynamic markets and a fast game where trade could be made in a matter of hours or minutes.
This is why he immediately fell in love with the Dow Jones and SP500 markets. These two indices are the main indicators of the economy of the leading country. The liquidity of these markets is always high and does not depend on the direction of the trend.

Not many players are willing to play sideways market when there is no trend, or when its boundaries are blurred and prices are dancing horizontally or sideways. Most players prefer upward or downward market, where the boundaries of the trend are marked. In such a market, everything is simple: trend up – you buy, trend down – you sell.

A sideways price movement is a market condition in which prices move chaotically and unpredictably, indicators do not work, forecasting is close to zero, and the risk of losing capital is very high. However, the amplitude of price movement in a sideways market is high and promises good profits to those who know how to play in such a market (the chart above shows all the signs and features of sideways movement, between the dotted boundaries. The price movement amplitude sideways is twice as much compared to the previous downtrend).

The sideways market interested Jack because the big players, or sharks, were the kind of players who did not risk playing blind when the price movements were not predicted and they were not drawing the well-known figures that the big crooks were so fond of, and one could not fear their shenanigans. Jack began to look for peculiarities that could tell him the tactics of the game. He noticed several:
A) The greatest market activity on the Dow Jones and SP500 indices occurred at the opening of trading in New York and lasted no more than an hour, during which prices performed the greatest amplitude. In other hours, until the market closed, the amplitude of the price sine wave did not repeat itself, chaotic price jumps were the work of market makers hunting protective stops on open positions of careless players. That is, when the first executed amplitude appeared on the chart, Jack could exit the monitoring and engage with clients who wanted a morning session;
B) at the end of the day trades, the prices would freeze in the middle of the drawn daily amplitude and remain there until the market opened the next morning. Nobody knew in which direction the first price jump would occur. And while the market was resting, Jack had time to analyze the whole dynamics of the day session on the charts. Jack was reading the charts like an expert radiologist reads a patient’s scans.
C) Both indices were directly correlated, their price movements were synchronous and equivalent in dollar terms.

All those ABC whispered to Jack an idea of a zero-risk strategy. He realized that he could try the tactic of instantaneous game.

***

In the early morning, Jack sips his coffee and looks up at the sky. The stars are fading and the clouds are outlined. Observing the universe gives Jack a sense of calm and determination. It is exactly what he will need in a few minutes when the gong rings at the Wall Street Stock Exchange in New York, inviting him to play.
Like a sleeping snake, the sine wave since yesterday’s close has frozen in the middle of the sideways price movement, between its borders. And there’s no signal of the direction its first big jump will be. To catch it, Jack simultaneously opens positions on two indices a few minutes before the market opens: LONG on one and SHORT on the other.
This is a classic hedge, where a profitable position offsets a losing one. Whichever way the prices move, the result will be zero for as long as Jack holds the hedge. With this hedge, his capital invested in the game is completely safe. Within the next minute, the market opens and prices have risen sharply. Jack waits for the sine wave to reach yesterday’s high, the upper limit of the sideways movement. He follows it on the hourly chart and catches the moment of reversal on the five-minute chart. Soon the price bars on the five-minute chart tell him that the sine wave is close to its top; they become smaller, indicating a decrease in volume. And here is the long-awaited key reversal bar, after which the sine wave turns and rushes towards the opposite, lower boundary of the sideways trend. With the next price bar confirming the price reversal, Jack closes the profitable position. The sine continues to move towards the middle and lower boundary of the sideways trend, the losing position becomes profitable and Jack closes it having received the maximum profit from both positions. The whole trade took less than half an hour and the strategy and tactics were successfully tested.

In the future, Jack will enter the game with five or ten contracts for each position, and the amount of his winnings will be several thousand dollars in one trade only a day.
Jack then goes to the office where he waits for calls from students who have bought his course. Throughout the day he continues to monitor the index markets, but no longer enters the game. He makes his bets early in the morning, while others are asleep.

For those interested in hedging, experts recommend assessing the probability and magnitude of the risk, developing an effective strategy, choosing a suitable trading platform, and finding a reliable clearing company and stockbroker.
These advisors cannot even imagine that an effective hedging strategy that delivers instant profits already exists. Jack invented it. But he won’t tell anyone. Why give away the chicken that lays the golden eggs?

***


HE WHO BETRAYS ONCE WILL DO SO AGAIN.
He was alone in his office when there was a knock at the door. Three entered, one of them a woman. Identifying themselves as officers of the National Futures Association, they told Jack that the purpose of their visit was an audit. They asked for documents, including the financial records of the educational CD sales. They were friendly and that was the atmosphere on the first day. During the audit, they had a frank discussion:

“Jack, our management has some questions for you, that’s why we’re here today,” said one, stirring his coffee in his cup. Your performance in managing client assets is impressive. But what’s surprising is that you guarantee them zero risk. There is no such thing in the industry, because there is no such thing as a risk-free game, and financial market speculation is all about risk. None of the advisers and brokers will risk giving guarantees to their clients. One of the mandatory documents for the agreement with the client is the “Risk Disclosure”, which states in black and white that there is a risk of loss. Your guarantees suggest that you are bluffing to deny risk to lure a client.

“Dear Gentlemen and Lady,” Jack smiled at the visitors, “I have provided you with all the documents you requested. If you think I’m bluffing, please prove that I’m cheating on my clients. I agree that speculating in the financial markets is a risk. And all my clients sign a mandatory “Risk Disclosure Statement”.
“I disclose my guarantees to the client in an additional agreement,” Jack continued, “It’s my initiative, it’s not part of the firm’s standard package, but it’s not against CFTC rules. My guarantee to the client is not a publicity stunt. He knows the risks, that he can lose his money. My guarantee is my commitment to the client that I will not over-risk his capital and will cover any losses in his account out of my commissions.

“That is to your credit, Jack,” said the woman in charge in a sensual voice, “but the crux of the Association’s complaint is that you are the only one in the industry who does things differently. If you promise your customers beyond the standard contract, you will one day become a victim of your honest motives. You should not give additional guarantees to those who are willing to risk their money knowingly. By signing our documents, the investor is already prepared for the possibility of losing his money. He will certainly use your commitment to sue you and us. Did you know that there are more lawyers in California alone than in Japan? They’re out there day and night, chasing the money of big businesses and corporations. You don’t change people, Jack, you don’t have to…”

The next morning they asked for educational course selling paperwork and there was a formal tone to their communication:
“Jack, there seems to be double bookkeeping. We’ve received complaints from people whose names are not on your paperwork. Here’s a list of them. For example, who is this marketing company that is selling your training course? It’s selling it for thousands of dollars and guaranteeing a profit on your behalf. Which is against industry rules, we make no such guarantees. So they’re holding you, Jack, responsible for their promises on your CTA license!”

This came as a shock to Jack. He knew nothing about the company selling his training course. That’s what he told the inspectors, but they probably thought they’d caught Jack red-handed and he is trying to get away with it.
“My partner is responsible for making the discs, stamping them, packing them, and sending them out to the customers,” Jack was at a loss.
He called Andy from the next room and after a few questions from the inspectors, Andy’s face turned as red as a boiled lobster shell. Andy confessed that he was giving some of his production to a marketing company and was just trying to increase sales. He was playing dumb.

The inspection was over and the officers said goodbye.
“Jack, we can’t punish your partner, he doesn’t have your license. Our license is both a privilege and a responsibility. From now on, be discreet in your choice of partners.”
The lady-officer shook his hand:
“Jack, you’re a good man. Thank you for your welcome and your honesty. I’ll be honest with you too. Remember what I told you yesterday? Your kindness doesn’t work where money blinds people. I sympathize with you, and I wish you’d become a cynic soon. Maybe that will save you from bad people.”
And she smiled sadly.


Jack was furious at his partner’s deception:
“Boy, all my life I follow the rule of never giving a second chance to someone who has betrayed me once. Because once betrayed, he always betrayed. But with you, for some reason, I hesitated after that story with the client’s money. Then you betrayed me by using my license to lose the investor’s money and then pretended to be the naïve victim of your passions. Now you’re going behind my back to peddling our training course, again using my license.
I can see that you’re hiding your rat-like nature behind the image of a simpleton or an idiot. There’s less risk of getting punched in the face, isn’t there? But I’ve had enough. Here’s a piece of paper, write a copyright waiver for my course. And go on, get out of here before I send you to another world, you know me”.
Jack hesitated for a second:
“I’ll go, though. You’re welcome to stay. You belong on this dung heap with stinking flies and filthy rats!”

A week later, Jack received the verdict of the association’s disciplinary committee. He was to be stripped of his CTA license for a year. After that, he could apply for reinstatement. But he wasn’t interested. From now on he only trusted himself. He was not changing his principles. Without principles, only a weathervane can turn.

***

EPILOGUE.
On the open veranda of one of the bars that dot the L.A. coastline sat a merry group of people. They had just returned from a boat trip, the salty wind still blowing in their ears. They were drinking and talking loudly, clearly enjoying themselves with the adventure they had.
“Guys, I promised you I’d tell you why I named my yacht ‘Hedge’,” one of them asked his friends for a moment of attention. Here’s the story. I named it after an exchange gambler who gave me the money to buy the yacht we were sailing on today. Once, he and I were playing pool at our yacht club and he lost a game to me. Our game was for a decent amount of money. He asked me if I had any financial market investments and said he would pay me back much more than he owed me, but on the condition that I buy a nice yacht with the money. Would you believe it, he made me fifty grand in just one month!”

“It would be interesting to meet him, maybe he could help me too,” laughed the other.

“I don’t think so, he’s already gone,” said the happy boat owner. His name was Hedge, and I named my yacht after him. I had never met a more intelligent man in my life. Hedge was a keen sailor and we got on well. In moments of revelation, he would tell me about his job as a financial trader. He said that where there was big money, there was no morality. He had trusted swindlers several times and lost everything. He said that lies and greed were the order of the day in the exchange gambling, and that’s why it’s not the clever but the cunning who win.
There was a rumor at the yacht club that he’d sailed his yacht to the Caribbean. I’m sure he is enjoying his mornings with black coffee there,” smiled the narrator. And Hedge loved old Scotch whisky, so here’s to his life in the Caribbean!”

Everyone laughed and toasted with their glasses.

© Copyright: Walter Maria
Certificate of Publication No.221073101163

Published inNovels

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