It got a little ridiculous when it was $500 -- on one phone call.
"We will bet on
," says a trader at a Manhattan-based hedge fund. "Somebody said, I'll bet you 20 bucks that the next time the phone rings it'll be so-and-so. So everybody in the office put 20 bucks on their guess, and for the first time
the phone didn't ring for a half an hour. And when it finally did ring, it was the deli and nobody had that pick. So we anted up again and before you knew it, it was up to 500 bucks."
If you believed what traders say
the record, you'd believe that these professional risk-takers don't even bet on the NCAA basketball pools that proliferate in every other office in America. On the record, traders will tell you that compulsive betting is gone with the go-go '80s; that these days the markets are too hectic; that they're too professional to indulge in such frivolity.
The Wall Streeters don't want another "greed is good" decade. So they try to keep the orgy amongst friends. But if you could get these fellows to talk
the record, away from fear of firings -- and even arrests -- you'd discover that on Wall Street, everything is still a bet. Indeed, it's just another element of the stealthy Dionysian party raging deep in the bowels of Wall Street. And the betting pools have taken on a 1980s tint.
"Sure, we've got a pool," says one trader on the equities desk of a major Wall Street firm in New York. "But it's more than just 10 bucks and fill out a sheet. You pay 100 bucks and reach into a hat to find out which team you got. Some people pay extra money to get more picks so they can get someone good, like, Kansas. Then they play the spread on each of these teams. So if the winner doesn't beat the spread, the guy who had the losing guy gets the winning team in the next round. When it's all done, you can get pots of $6,000 and up."
On one bond trading desk, bettors can purchase options on each team in the NCAA tournament and go long or short teams as the tourney moves steadily from 64 teams to the Final Four. At another desk, bets on the score of the final game are sold for $1,000 each, with the winner taking home more than $20,000. "There are definitely guys who have bookies," says another trader. "But I think for most of them, this is it. They gamble only when they're at work -- but they gamble on everything."
Such as? "It's a slow summer day at the ... fixed-income desk and one of the guys is trying to get his hair cut for free," says one trader. "So he says, 'For $400 I'll get a crew cut.' And a guy across the way shoots back, 'Yeah, for $4,000 I'll get my head shaved bald.' So everybody in the room starts chipping in. We get together the money, and they call up a barber, quick, before our guy can change his mind. And right there on the trading floor, lathered him up and shaved him bald."
A former trader says that there was a running bet that no one could eat two pieces of Wonder Bread in one minute. "I know one guy on the desk who lost $1,000," he says. "So they brought in a ringer, like the bookie's friend, and he says he can do it, but the guy goes on to lose $3,600."
Other desks use the betting to haze rookie traders. "When we get a new guy who thinks he knows what's going on, we'll get him to bet $100 on the first stock to come across the tape," says a veteran trader. "He might say, 'Uh,
was pretty busy yesterday, I'll take P&G.' But I'll take that morning's big IPO, which is always the first on the tape. Usually we can get a new guy a couple times before he figures it out." At another firm he says they'd bet on the hair color of the next guy on
But when it comes to betting on the markets, the granddaddy of them all is the
Chicago Mercantile Exchange
reported that the 1991 Super Bowl pool on the Merc had a $100,000 pot. Their NCAA pool reportedly is $1,000 per entry.
But Chicago is also the reason that most traders strive to keep betting pools hush-hush. Gambling, even office pools, is, of course, illegal. In December 1991, a federal judge called on the U.S. Attorney's office to investigate allegations of a $64,000 college basketball pool at the
First National Bank
of Chicago. And First National was forced to respond with a lame comment: "It's believed to be prevalent in American business." In other words, the bank said: "B-b-but everybody's doing it."
On Wall Street, that couldn't be more true -- still. It's more than a part of the culture; it's a necessary part of a successful trader's blood. "These guys bet the market," says one Street veteran. "They're risk-takers. That's what a trader is. He gauges risk, he has an edge and places his bet. These are guys who
Another Wall Street veteran was part of some of the famed elevator betting games detailed 10 years ago in Michael Lewis'
. "I walked out one day and two partners asked me if I wanted to bet on which elevator would come next," he says. "Now I'm new in this business, so I said, 'Uh, well, how much are you guys betting?' And it wasn't thousands, or hundreds. They said: '25 cents.' That's when I realized that it wasn't about the size of the bet -- it was about the bet itself."
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