Humility is not the first thing that comes to mind when you think of rough-and-tumble derivatives traders on the old Liffe exchange with their gaudy blazers bursting with self-confidence. Yet John Sussex’s autobiography, written with financial journalist Joe Morgan, reveals remarkable modesty mixed with inevitable pride in his substantial achievements. At the same time he recalls with candour the white-knuckle rollercoaster ride of the financial markets and the trading careers that animate them. His story is filled with all the animal spirits, schoolboy japes and obvious pleasure that made it all so colourful.
Given the dreary banker-bashing and rogue trader scandals currently doing the rounds, Day One Trader provides a welcome antidote. Sussex was in fact the Essex son of a factory worker, who made his fortune in the City in the brash, globalised world of derivatives. He built what became, rather briefly, the largest independent brokerage in Europe: Sussex Futures, and was eventually elected to the Liffe Board. He was one of ‘Maggie’s Boys’ who made good in the frenetic meritocracy of London’s financial district.
You do not learn much about the technical side of trading or financial engineering – indeed it might help if you know something already – but you will learn an awful lot about people and the culture that makes the markets breathe.
This is a very masculine sort of story, filled with testosterone and bravado, the sheer grunt of physical stamina to endure the trading pit scrum and the hot-house arithmetic agility to cope with the staggering speed and risk. You can smell the coffee, as it were, along with the greed, sweat and fears that drove the markets. We hear about dodgy practices like front running, flipping, spoofing or ‘out trades’. Nor does he mince words about the ‘in-your-face tactics of intimidation’ and one-upmanship. But more importantly he builds his story on the bedrock of trust and commitment, without which the markets just do not work: on the ‘hard work ethic’, the need to ‘share the trade’, reciprocate good deeds, and inevitably keep one’s word.
His gentle, balanced acceptance of it all is just so impressive, and clearly won him the loyalty of those around him. In turn, Sussex demonstrates a real respect and affection for them as well: their strengths and weaknesses, warts and all, sometimes even when they betrayed him.
This book has what Frank Partnoy once described as the ‘visceral power of narrative’. It shows an almost picaresque delight in the heroes and rascals that populate his life, while giving brief air-time to such notables as ‘a young, polite blonde woman named Clara Furse’ or Cherie Blair or even Her Majesty the Queen.
Sussex’s career spanned three decades from an early visit to Chicago, to the launch of Liffe at the Royal Exchange, the professionalisation of open outcry, the crash of ‘87, the rise of Singapore, Liffe’s move to Cannon Bridge, his election to the Liffe Board, the loss of the Bund futures market to the DTB and the inevitable shift to electronic trading. He provides interesting insights into the cultural evolution, the different skills required, and operational risks involved for both the old open-outcry and new electronic trading worlds. His comments on Nick Leeson’s motivations, for example, add a further dimension to that sad story.
Sussex had his ups and downs and is refreshingly open about them. He persevered against the odds. Of course, one always would like a bit more detail. Clearly discretion imposed limits, but the story is already very rich, and there is much to ponder.
Because locals were risking their own personal money and reputations, they adopted prudential disciplines with a passion that public limited companies cannot match. The rationale for Glass Steagal perhaps becomes a little clearer. He also observes how the impersonalisation and scale of electronic trading erodes some of the stabilizing forces that made the old markets work, turning ‘sophisticated instruments’ for managing risk into ‘supercharged gambling machines’. Yet, Sussex has no political agenda. He leaves us to draw the conclusions.
In the end, Day One Trader is an English success story and a kind of morality play for our time. The world we have lost still has much to teach and inspire us.
By Bob Giffords, Independent Banking & Technology Analyst