Column: Unofficial Buyside Training Manual

Along with the institutional equity business, the dynamics between between buy and sell side traders are always evolving. Fortunately, most clients operate ethically and are very conscientious of how they interact within today’s marketplace and are sensitive to the many restrictions recently placed upon our expense accounts.

Technically, and on paper, we no longer entertain. We educate. We add value. We no longer have dinner for four, spend enough for 15 and then head to VIP’s until 3am. We now invite analysts and strategists along, so that we can refer to these gatherings as conferences. And when we have five for dinner, we spend for four.

Anyway, for every eight buyside traders that get it, work within the rules and are a pleasure to deal with, there are at least two buyside pirates that the Street continues to harbor. Your typical sales trader covers at least three of these guys. These shysters share way too many of the same traits for this to be a coincidence. Either these guys were all trained buy the same pick pocket or there must be a buyside trader’s secret society hand book.

Unable to obtain the true buyside manual, I have come up with what shall be referred to as the: Unofficial Buy Side Trader’s Trainee Manual

Rule one – Always second guess your coverage. Second guess everything, whether he’s distributing morning research or giving reports.

Never give your sales trader your entire picture. Even if you’ve know him since high school and vacation in his summer home on the Jersey Shore every year. It’s a power thing.

Micro-manage your smallest orders. Brokers love that.

Be sure to belittle your coverage early and often. It helps with the bonding process and reminds them who’s boss.

Try not to laugh out loud at any of their jokes, and instead, use awkward silence whenever possible.

Sales traders are not your friends. They want your business. Repeat this to yourself 10 times a day, it will help to make you salty.

Routinely complain that your orders are being whored too heavily across the Street and are getting back to you.

If you agree to cross a block of stock "in-line" and the stock should move against you, simply ignore the phone ringing and continue to stall before hitting the send button.

If after crossing stock, the stock should move more than 2 cents, get your coverage on the phone immediately and accuse them of working for the other side. This shows them that you’re paying attention and helps to set the tone for the next transaction.

Sales traders are not that bright and know nothing about the stocks they traffic in. Never miss an opportunity to point this out. It makes you stronger.

Ask for opening looks no earlier than 9:27. This helps start your coverage’s day on the right foot.

If you get the sense that your coverage is going to be leaving early for a business trip, take every order you have and attempt to light him up just before he leaves.

Everyone has capital. It doesn’t matter what they tell you or how they market their firm. They have capital. Demand it.

If your not happy with your execution, wait until 3:55 to call you coverage demanding an in-depth explanation, and when they’re done… ask them again.

Remember, we don’t ever "make it right" on our end.

If a broker should stop you on a position and they end the day with a significant loss – This is the perfect opportunity to step out 70% of the trade and then follow up with a request for Yankee tickets.

Never be specific. You’re average size order will require a minimal of three sets of contradictory instructions.

On the rare occasion you should find yourself with conviction or need to get something done in-line, and specifically tell you coverage that "you would" in-line, that doesn’t mean you shouldn’t feel free to throw the VWAP in his face. That being said, if you have conviction – lose it. There’s no place for it on this side of the business.

If your primary coverage is out and your backup picks up – ALWAYS say you were calling to talk about Fantasy Football and that you’ll call his cell.

There’s nothing wrong with leading them to believe it’s just the "tip" of the iceberg if it gets you on the tape. Just avoid the phone and set you IM to away afterwards.

No matter how good a job your broker is doing or even if they have a natural, always give your "tails" to some sloppy heavy-thumbed regional. You’ll look like a super star.

When being entertained, don’t be shy. Always reach for wine list and never the check. Once you’ve got the wine list, go directly to the back and straight to the bottom.

Accept and take advantage of any and all offers including sporting events, concerts, dinners and golf outings. Never feel obligated. Brokers may try and sing a different tune – they like to talk about having to justify expenses and how difficult it was putting this through and that through… blah blah blah. It’s all nonsense; it’s not even their money.

After dinner it’s always a smooth move to ask for a little take home for the wife. There’s nothing wrong with an extra filet and a piece of chocolate cake to go. It shows character.

Anytime you attend a broker-sponsored golf outing, be sure to forget your golf shoes and rain gear, even if there is a 110% chance of rain. Then innocently pick out the FootJoy Classics at the pro shop.

You’re only as good as your last trade


Dopey was the founder of the Web site, For two-and-a-half years, Dopey offered his wit and wisdom about the "untold stories" of Wall Street to a faithful following on trading desks and curious onlookers across the country. It should be noted that the firms, people and practices depicted in this column are fictitious. Any similarities to actual firms, people and practices are purely coincidental.

The views represented in this commentary are those of its author and do not reflect the opinion of Traders Magazine or its staff. Traders Magazine welcomes reader feedback on this column and on all issues relevant to the institutional trading community. Please send your comments to