Why Did Nick Kokonas Offer to Pay His Own Boss?

Nick Kokonas offered to pay a floor trader for the chance to work for him, because that trader was the only person in the pit who could teach what he was after. The man had studied quantitative finance at the University of Chicago, worked at Chicago Research and Trading, and quit when the firm kept him off the floor for being too much of a quant. He was trading very small, with a programmable calculator, and he had just hired a clerk.

Kokonas told him to ignore that hire. He said he would pay to work for him. The odd offer got the trader's attention. The pay that came back was about $250 a week, which Kokonas thinks would be illegal now. Six months later he had a basic sense of how to make markets in options. He put up $20,000, the trader put up $40,000, and he started trading Swiss franc options.

The goal he had set was a badge and a place in the pit within a year. He was a week late and counted it, because the process was already underway. The rule he later gave the 30 or 40 people he taught was simple. On the first day in the pit, you make one trade. You open your mouth in a loud, zero-sum room and risk looking like an idiot.