S. Rabbani: literary fiction, instructional articles, essays & translations
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Short

By Sahand Rabbani


HE WAS SHORT.

Not short in the sense of his height. In fact, he was quite tall at six feet and two inches. Rather, he was short corn. More precisely, he was short corn futures. He had sold contracts to deliver corn in a month, wagering that the price of corn would drop so that he could purchase it at a cheaper price and profit with his foresight. But after he had sold these contracts to a party he thought to be an uninformed hedger, the price of corn futures began to rise. For every point that the contract price gained, he was out another twenty thousand dollars of his own money, which he had staked that day as he did everyday to make his living.

He was a floor trader at the Chicago Board of Trade. He wore a red vest with his three-letter identification tag based loosely on his name. He fought in the pandemonium of the trading pit seven hours a day, five days a week. He posted his collateral from his own bank account, whose contents he had gradually grown over a decade. But a one-hundred-point increase in the price of corn futures at that precise moment was sufficient to undo his entire net worth of two million dollars. And though history suggested that such a move was extremely unlikely, the past was only ever an imperfect descriptor of the possible states of the future.

He avoided denominating his wealth in terms of the risks of his trade, but at that onset of a sickening rally, he witnessed the price of corn climb three points on the electronic display that oversaw the pit, and there had gone three percent of his wealth. As soon as he had moved to buy back a few of the contracts to dampen his risk while admitting some amount of loss, he watched the posted offers slide even higher, driving his position further into the red.

While large swings in prices and profits were quotidian headaches, as certain as morning coffee or an afternoon smoke, there was something initially startling about this price appreciation--not its magnitude (or not yet), but its speed. He had always considered that price movements, like the movement of massive objects, could not occur with arbitrary haste, that there had to be some continuity in the markets. But the event to which he was witness either threatened his theory or redefined his intuition of exactly what constituted arbitrary haste. In what seemed like five seconds' time, the three-point move had become five.

Only at that moment did his routine concern boil into uncomfortable fear. He immediately bought back several contracts at a significant loss, but the majority of his risk was still exposed to the bubbling corn prices. His buying interest contributed to an even further rally.

The offers vanished quickly now, too quickly to lift. The first stages of resignation surfaced: he began to consider what impact the loss of five percent of his net worth would have on his life. He was married, but did not have children. The loss was frustrating, but not devastating. It was two thousand dollars per week for an entire year. That was quite a lot, on second thought, he had to admit.

That second thought, however, had cost him dearly, for in the time since he had last glanced at the display, the offer had receded another five points. Frustration turned to panic. He would hold his short position, he decided. He could not allow himself to realize such a great loss. Surely, the market would correct itself. Once the absurdity of the move were noticed, trading forces would quickly temper the price. He would stop trading for the day once this ordeal had passed. He would write off that day's losses and start again the following morning.

Perhaps, at worst, he could accept that loss, but certainly no more, he decided. He would simply be happy to get through this with no further damage. The price would deflate, no less, return to the levels before he had accepted the trade that thrust him into this torture. After such a move, any further rally would be unlikely, irresponsible. The world was a reasonable place with reasonable people. The price could go no higher, he convinced himself.

He had been optimistic. He had unwisely conditioned his mind to be unprepared for what followed. The ten-point rally turned to twenty. He was incredulous. Self delusion prevented him from considering the impact this would have on his quality of life. He had focused his entire consciousness on one futile task. He believed, for a moment, that if he imparted enough mental exertion he could, somehow, convince the price to revert--somehow talk it down from its unbearable height. But it seemed that every such attempt just pushed it higher and higher. He felt his gut fall out from below. He felt lighter, like a balloon. He felt like he was floating higher and higher.









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