We bailed out of our short position in Apple early yesterday, sidestepping the punishment the stock was to inflict on bears later in the day. Although the Dow Industrials got socked for a 150-point loss, Apple was up as much as $4 intraday. This would not have surprised anyone who parsed our commentary here the night before: “End of day action in AAPL shares,” we wrote, “suggests the whack-jobs will be out in force Tuesday, providing short-squeeze fodder for the dirt-bags who manipulate this stock for a living.” 

Whack-jobs and dirt-bags, indeed. I was arguably one of the latter, in theory if not in practice, when I worked as an option dealer on the floor of the Pacific Stock Exchange for about a dozen years. But I don’t recall thinking of myself as a predator back then, only as the prey of the far weaslier dirt-bags who worked for Goldman Sachs, Morgan Stanley, Bear Stearns et al.

The Knowledge Secret

My grudging admiration for the weasels at one of those firms in particular goes back to the early 1980s. On one memorably hectic Friday afternoon, a floor broker who worked for the firm came into my pit to buy some call options on Resorts International (RTA) about 60 seconds before the closing bell. To say that this brokerage firm traded RTA options knowledgeably would be a bit of an understatement. Maybe that’s because they were also the casino operator’s investment banker at the time.

Anyway, this particular trade, occurring as it did just moments before the closing bell, and anticipating a turn of events in Resorts shares that, to say the least, proved most fortuitous for the firm’s customer, was just a little too weasely for me. So much for honor among thieves. I rang up a friend at Barron’s,  providing her with information that resulted in a small news item that caused the brokerage firm more than a little embarrassment.

Avoiding Shivs

If it had been a fellow inmate at a prison that I’d ratted out, I might have expected to emerge from the trading pits one day to find the sharpened end of a toothbrush wedged between my ribs. But this was the stock exchange, after all – a civilized if noisy place -- and it was only the relatively innocuous jabs of pens and pencils wielded by the firm’s head broker in the crowd that I was tasked to avoid.