Friday, November 13, 2009

Zooooooooooming

Does anyone remember Ayrton Senna?? Amazing as he was, I do not hear mention of his name often these days. While I do not watch CNBC very often either, I happened upon it last night for a few moments, and was transfixed by the deepening black sallowness of Maria Bartiromo's eyes, punctuation marks on time passed since her entry into the mile-high club. This was followed by an uber-slick, adrenaline-coursing formula-one race video - the kind where you can smell the burning rubber of the tires and feel the downshifts viscerally in one's mid-section. The ad was for FX-Pro one of the rapidly mushrooming FX trading sites peddling slick-colourful GUIs that make the day-trader feel like a trader coupled with obscene leverage. What was a peripheral phenom that began with simple tax-advantaged spread-betting and a pachinko alternative for Mrs. Watanabe is now huge business with nefarious Russians in warm offshore locations seemingly at the fore, making one wonder whether there is some grand money-laundering purpose behind the more overt feeding of the adrenaline-driven gambling beast via direct and leveraged FX market access, whether from your PC or iPhone.

But watching this Formula-1 machine weave its way around the track, with the powerful male voice-over trumpeting the unimaginable speed and power in your hands via FX-Pro (or CML or any one of a hundred other access providers peddling addiction via dreams) I had that awful feeling one has when witnessing the Private Equity purchase of EOP, the superbowl ad for Pets.com in 1999, or 300-words-per-minute urgent pleading for you to obtain a variable mortgage with a balloon repayment and teaser rate. Despite these premonitions, the blue F-1 car revved and swerved with increasing fury, that I nearly found myself with a phone mesmerizingly dialing their number to open account. Well, almost...

Yet Formula-1 is a dangerous sport, not dissimilar from surfing the edge of leveraged FX. Shit happens. Markets move often unexpectedly, and frequently in the wrong direction. Stops are triggered. Margin calls are issued, positions puked triggering yet more stops, and further negative gamma hedging from those short OTM vol. JPY moves 17 big figures overnight. Ouch!!
Even pro's get carried out. People who should have known better. Maybe that's why we don't speak of Ayrton Senna very often. He for he reminds us just how thin the tether actually is, between life and death - even for the greatest and most skilled in the world. One wonders how long one's "father" or "Brother" would last out on track in the pack, if they had the keys to such a machine...which is what FX-Pro and their brethren are doing each and every day.

3 comments:

Charles Butler said...

Engineer yourself to death - one penny at a time.

http://www.cyborgtrading.com/solutions

paul.murphy said...

Strewth

Bøddel said...

http://www.youtube.com/results?search_query=racing+is+in+my+blood&search_type=&aq=f