A little bit more about my time as a commodities broker.
I started out selling currency options. Options can be pretty confusing, and truth be told; I still don't understand everything about them. When I was doing it, currencies were a completely unregulated market. There were dozens of firms in South Florida doing it because there was no one to say whether we were upholding any type of ethical code. Many companies were outright robbing their clients, and lying to them as to whether they actually owned any contracts. Mine was a little bit more legit.
The idea behind an option is that, for a small dollar amount, one can leverage a large amount of a given commodity, or stock, or currency. Contract sizes differ from commodity to commodity, but when I started out, we were selling Euro/USD call options.
We were predicting that the US dollar would lose value against the Euro. My job was to call people up, get them excited about it, convince them that they could make a lot of money, and then have them send our clearing firm $5-$10,000.
The problem is, usually, the options would lose value pretty rapidly, and expire. The investment would be worth zero in less than three months time.
Now, we actually had an outside clearing firm, called PFG at the time. The company was simply collecting commission on the options they sold. However, as I mentioned before, the group of people I worked for had been doing this in Spain prior to coming to Florida.
While they were in Spain they owned their clearing firm and their brokerage.
That's important because they were able to sell their own options. They could sell you an option, collect commission on the sale in their left pocket, AND put the money you actually spent on the option in their right pocket.
So they would charge HUGE commission and sell you a shitty position. You might as well have been handing them ten thousand dollars and then walking away.
Eventually from what I understand, Interpol caught up with them and froze their clearing firm's account. It had something like ten million in it. They moved to Florida.
Now, I didn't know all that when I started working for them. All I knew was, there's a lot of successful people around, I'm living in a halfway house, I want to drive a SL600, and I want Zegna suits, and Gucci shoes, etc etc. And I hadn't seen the movie Boiler Room.
When I started working for these guys they had already established a commodities firm. Commodities are highly regulated. One must obtain a license to sell them, you gotta pass an exam and a very thorough criminal background check.
There were three guys who owned these two firms. Of the three, two had been in Spain, one of them had his commodities license pulled while he was out there, and one had a felony in Florida for cocaine trafficking.
The guy with the clean record started up a legit commodities company with money the other two gave him. He then hired them as consultants on the books and paid them that way.
Which is one reason I don't have a license anymore.
The other reason is, they didn't give a shit about making people money. They were in it for the commission. They gave their employees a story that makes sense, and trained them to pitch it on the phone. We didn't have any real use for market knowledge. We were salesmen. So they hired a guy to train us to pass the series 3 exam, and then they gave the testing agency a letter saying that English wasn't our first language, buying us an extra hour to pass the test.
Well, The National Futures Association, which is basically the Securities Exchange Commission for commodities markets, found out.
And after a hearing in Chicago they tore our licenses up.
Which is fine. I may only know a portion of the financial world. I don't believe I saw the ugliest part, and certainly not the best part. But from what I saw, it's definitely not the place for me.
I am now working in a treatment center. And I found out yesterday that I've been approved for a few grants to get back into school. My experience as a 'broker' is one that taught me a lot, but I consider it kind of a bump along a road. The greed, the deception. It's too much.
I started out selling currency options. Options can be pretty confusing, and truth be told; I still don't understand everything about them. When I was doing it, currencies were a completely unregulated market. There were dozens of firms in South Florida doing it because there was no one to say whether we were upholding any type of ethical code. Many companies were outright robbing their clients, and lying to them as to whether they actually owned any contracts. Mine was a little bit more legit.
The idea behind an option is that, for a small dollar amount, one can leverage a large amount of a given commodity, or stock, or currency. Contract sizes differ from commodity to commodity, but when I started out, we were selling Euro/USD call options.
We were predicting that the US dollar would lose value against the Euro. My job was to call people up, get them excited about it, convince them that they could make a lot of money, and then have them send our clearing firm $5-$10,000.
The problem is, usually, the options would lose value pretty rapidly, and expire. The investment would be worth zero in less than three months time.
Now, we actually had an outside clearing firm, called PFG at the time. The company was simply collecting commission on the options they sold. However, as I mentioned before, the group of people I worked for had been doing this in Spain prior to coming to Florida.
While they were in Spain they owned their clearing firm and their brokerage.
That's important because they were able to sell their own options. They could sell you an option, collect commission on the sale in their left pocket, AND put the money you actually spent on the option in their right pocket.
So they would charge HUGE commission and sell you a shitty position. You might as well have been handing them ten thousand dollars and then walking away.
Eventually from what I understand, Interpol caught up with them and froze their clearing firm's account. It had something like ten million in it. They moved to Florida.
Now, I didn't know all that when I started working for them. All I knew was, there's a lot of successful people around, I'm living in a halfway house, I want to drive a SL600, and I want Zegna suits, and Gucci shoes, etc etc. And I hadn't seen the movie Boiler Room.
When I started working for these guys they had already established a commodities firm. Commodities are highly regulated. One must obtain a license to sell them, you gotta pass an exam and a very thorough criminal background check.
There were three guys who owned these two firms. Of the three, two had been in Spain, one of them had his commodities license pulled while he was out there, and one had a felony in Florida for cocaine trafficking.
The guy with the clean record started up a legit commodities company with money the other two gave him. He then hired them as consultants on the books and paid them that way.
Which is one reason I don't have a license anymore.
The other reason is, they didn't give a shit about making people money. They were in it for the commission. They gave their employees a story that makes sense, and trained them to pitch it on the phone. We didn't have any real use for market knowledge. We were salesmen. So they hired a guy to train us to pass the series 3 exam, and then they gave the testing agency a letter saying that English wasn't our first language, buying us an extra hour to pass the test.
Well, The National Futures Association, which is basically the Securities Exchange Commission for commodities markets, found out.
And after a hearing in Chicago they tore our licenses up.
Which is fine. I may only know a portion of the financial world. I don't believe I saw the ugliest part, and certainly not the best part. But from what I saw, it's definitely not the place for me.
I am now working in a treatment center. And I found out yesterday that I've been approved for a few grants to get back into school. My experience as a 'broker' is one that taught me a lot, but I consider it kind of a bump along a road. The greed, the deception. It's too much.