William calculated in his mind: the NASDAQ is currently just over 5000 points. In five days, on March 7th, it will reach its historical peak of 5048 points. With a $350 million base at a 3% margin rate, he could buy 9039 lots of index futures. Each point of fluctuation would mean a gain or loss of $2.23 million, and his additional $49.56 million margin would cover a 20-point swing. This was manageable.
He promptly decided, "You're concerned that my additional margin might be quickly depleted, right? I can sign a contract stating that if 90% of my $49.56 million additional margin is lost, you can forcibly close my positions. This 10% buffer gives you time to liquidate, ensuring no loss for you. Besides, I have $350 million in principal. Even if there's a 100 or 200-point fluctuation, I won't go bankrupt; at most, I'd lose half. Mr. Greyson, if you can't commit under these terms, I'll have to find another bank."
Greyson pondered for a long time before finally responding, "Mr. Devonshire, it's nearly noon. How about Felix accompanies you for lunch? By 1 PM, we should have a decision regarding your margin rate."
"Okay. This is my first time in Switzerland, and having a local guide will help me enjoy authentic Swiss cuisine. Mr. Greyson, I look forward to your good news."
Felix, proving himself as an adept account manager, took William to enjoy a delightful meal. They savored Zurich-style veal with Rösti, raclette, and a hearty seafood chowder. The food was excellent.
At precisely 1 PM, Greyson called, "Mr. Devonshire, the board has approved your request: a 3% margin rate, with positions liquidated if additional margin losses exceed 90%. Congratulations, Mr. Devonshire."
William knew the National Bank would agree because they had no risk under these terms. Given the NASDAQ's current high level, many believed it could rise to 6000 points, and the bank assumed William was betting on an upward trend.
Of course, William wouldn't reveal his exact strategy to the bank. He replied, "When can we arrange the contract?"
"We can do it now, Mr. Devonshire," Greyson assured.
"Okay, I'll head to the bank shortly. See you soon, Mr. Greyson."
"See you soon, Mr. Devonshire. Goodbye."
After hanging up, William turned to Felix. "Felix, I need the best law firm in Switzerland to meet me at the bank. I'll pay $100,000. Can you arrange this within half an hour?"
"No problem. For $100,000, I'll ensure it happens," Felix said, excusing himself to make the call.
After a five-minute wait, Felix returned, informing William, "Mr. Devonshire, it's arranged. We can head to the bank now."
"Alright, let's go."
Twenty minutes later, upon arriving at the bank, the lawyers were already waiting. William shook hands with the Swiss legal team, introducing himself.
After exchanging greetings with Greyson, they started the negotiations. With the lawyers' help, William reviewed and revised the contract several times. After three hours, they finalized the deal just before 5 PM.
William then told Greyson, "Mr. Greyson, I need your bank to assemble a professional team of 10 people by tonight."
"No problem, Mr. Devonshire. I can provide the best team immediately," Greyson responded. "Felix will prepare everything. Our fee is 5% of the profits or a daily rate of $100,000."
William thought for a moment, then said, "If there's a loss, I'll pay the daily rate of $100,000. If we profit, I'll still pay $100,000 per day plus 1% of the profits. However, I require the strictest confidentiality agreements."
William turned to his lawyer, "Can I include a clause that imposes a minimum 20-year prison sentence for any breach of confidentiality, Mr. Simon?"
Simon pondered this and replied, "If a breach results in significant financial losses, certainly. If it's merely reputational damage, it depends on how the courts assess the impact on your reputation, which can be subjective. However, if you're willing to pay a substantial signing bonus to this team, I can guarantee that anyone leaking information will face at least 20 years in prison."
"How much should I offer as a signing bonus, Mr. Simon?" William asked.
"About 1 million Swiss francs per person, roughly 1 million USD."
William turned to Greyson, "Can you arrange that?"
"Of course, Mr. Devonshire. Even without the bonus, I assure you that our bank staff will never leak any information," Greyson promised.
William wasn't inclined to trust these bankers. He viewed them as opportunistic and untrustworthy, despite their outward professionalism.
After an hour, the 10-person team arrived, and William shook hands with each member. Simon briefed them on William's requirements. Hearing about the 1 million USD signing bonus and the daily rate of $100,000, they all signed the contract without hesitation. The 20-year prison clause didn't seem to faze them.
By the time William had finalized the contracts with the new trading team, it was 7 PM. He and Felix, along with Simon, went to a Michelin three-star restaurant for a lavish dinner.
After dinner, William signed a $100,000 check for Simon, who gratefully said, "Thank you, Mr. Devonshire. If you have any issues or problems in Switzerland, you can count on our firm. We're the best law firm in Switzerland, and we can handle anything as long as you can pay."
Hearing Simon say they could handle anything for the right price made William chuckle inwardly. "Isn't that obvious?" he thought.
"Thank you, Mr. Simon. Have a good night. If I have any problems, I'll contact you. Goodbye," William said, shaking hands with Simon and his team before they left. William's new trading team was already in a secure room at the bank, preparing.
Entering the VIP client secure room, William saw the team resting on sofas and lounge chairs with their eyes closed. Not wanting to disturb them, he found a chair and sat down. Just as he was enjoying a glass of whiskey, his phone rang.
William quickly answered, "Hold on for 10 seconds." He stepped out of the room and into the corridor, then spoke into the phone, "Hello, who's this?"
___________________
Read Ahead
P@treon.com/Mutter