My dad, a career broker, used to really like to talk about his work. As a kid, I was totally uninterested and mostly tried not to listen, but it’s amazing how much snuck in.
I remember two conversations we had about short sales. The first was when I was 10-12ish, first time he explained it. I forget how it came up, I think somebody on the radio mentioned it and he asked me if I knew what it meant. He liked to quiz me about things we heard on the radio. He explained. I wasn’t sure I understood.
“Wait, it’s when you sell something that you don’t own? How can you
do that?”
“You borrow it first.”
“That doesn’t make any sense.”
“ I know!”
I think he was amused by the absurdity of it, or maybe just by my reaction to the absurdity of it. But there was definitely no attempt to disguise the fact that it was, in fact, absurd.
The second, I was probably in my early- to mid-20s, and it was much more… practical. He wanted me to know how to do this stuff if I wanted to. He had a mental list of things he wanted me to understand. Mostly he would explain the mechanics of how some transaction or instrument worked, then I would ask why you would want to do that, to which he mostly had non-specific answers around “well, it could be part of a strategy…”.
Two things stood out as different: short sales and selling naked calls. He explained the mechanics, I asked why you’d do that. “Well… don’t. Don’t do that.” I wish I could remember exactly what he said, but he made it clear that they were too risky, and that the guys who did a lot of those were… a bit sketchy. Or, sketchier.
The opening up of retail trading was bad for him professionally, but I think he liked that it made things more accessible for people. I remember him talking about the switch from listing prices in fractions to dollars and cents. He ended up getting an E-Trade account after he retired.
I’d love to know what he’d think of this GameStop mess. I wish I could ask him.