Steve Peras lives in Brooklyn, but his alarm clock is in London. Every weekday at 5 a.m. his bedside phone rings. London calling.
Peras and the voice on the other end talk to each other so often they don’t bother to say hello. Peras picks up. “Much lower,” intones the voice.
The U.S. dollar has dropped again in European currency markets. To Peras it’s vital information: He’s a foreign exchange trader, a man whose livelihood depends on knowing the value of a dollar—out to four decimal places.
The wake-up news that the dollar’s dive is continuing means that Peras faces another 12-hour day of hectic activity. In January the dollar lost almost 10 percent of its value against the West German mark and 6.5 percent against the Japanese yen. When the dollar moves—up is as good as down—traders like Peras pounce. Even micro shifts of a few hundredths of a cent can cause tens of millions of greenbacks to change hands and cross borders in the blink of an eye. Huge profits and losses hinge on every second-by-second twitch of the exchange rates.
In this business, time is literally money. Which is why Peras, a vice-president of Irving Trust Co., a Wall Street commercial bank with offices around the world, starts his day with a briefing from London. The trends there will shape the day in New York.
Foreign exchange—or FX—specialists like Peras spend most of their waking hours talking about the dollar. When the buck seemed to strap on skis early this year and take off on a hair-raising downhill run, suddenly the whole world joined the dollar watch. And with good reason. Everyone was affected. The declining dollar has already boosted the cost of many imported goods to the American consumer by 15 percent on average since late 1985, with further hikes coming. The prospect of decreasing export sales has spread alarm in West Germany and Japan and cautious optimism among American manufacturers, whose goods may become more competitive abroad. That in turn could eventually chip away at the monumental 1986 U.S. trade deficit of $169.8 billion.
The exchange rates that Americans have been reading so much about are simply a moment-by-moment reflection of the buying and selling done by Peras and his brethren around the world. By 7:30 a.m. Peras is at his Wall Street command post, hunched over three video screens displaying the latest exchange rates and financial bulletins. Stacked in front of him are nine telephone speakers and a panel of 120 blinking buttons—each one a phone line to his customers, competing banks or currency brokers in foreign cities. Barking “Irving” into the phone each time, he punches through as many as 500 calls a day.
Foreign exchange traders are an opinionated lot, combative and street smart. Peras’ opinion this morning is that the dollar, falling overall, will stage a short-term recovery. He scents an opportunity. A bank in Switzerland calls, wanting to sell Peras five million U.S. dollars—”five bucks” in trading lingo. He makes the deal for Irving, paying at the prevailing exchange rate, 7,655,000 Swiss francs. Peras says his greatest asset as a trader is that “I’m a very patient guy.” Now he proves it. Seconds tick by. Peras sits tight. After a minute, the exchange rate creeps up 15 hundredths of a Swiss centime. Peras punches a button. A bank in Chicago wants to buy five bucks. Peras sells, collecting 7,667,500 Swiss francs. Irving’s profit is 12,500 francs, or $8,151. The trick, explains Bob Ryan, Peras’ boss at Irving, “is like the Kenny Rogers song, ‘You’ve got to know when to hold ’em and know when to fold ’em.’ ”
Though he drives an Audi 5000, appreciates wine and wears black tassel-loafers, Peras, 30, is not a Wall Street yuppie. No Harvard MBA, he attended a local school, Pace University. He and his wife, Ginny, 30, an intensive-care nurse, own a small two-family row house in a blue-collar neighborhood. The son of Italian-Yugoslav immigrants, Peras grew up in the neighborhood, and he still lives within walking distance of his parents and brother. For relaxation he plays the accordion and sings Italian songs.
Peras is in charge of what is called the spot desk, where the action is loud and fast. With guys holding two phones to their heads and scribbling orders on blue (buy) and pink (sell) slips, it isn’t totally high-tech but suggests Mission Control crossed with a cab dispatch desk. The six traders are constantly bellowing at each other for prices on different currencies and to confirm deals. They shout their orders like deli countermen. “20/25 Swiss!” they yell. “Franc!” “Fifty million Danish!”
There are no middle-aged men on the spot desk. “It’s such a grueling job, physically as well as mentally, that 90 percent of the individuals in it are young,” says W.R. (“Billy”) Samela, 30, the marks trader. The spot desk is usually swathed in cigarette smoke. The traders are salaried employees, not entrepreneurs; but top ones like Peras earn in excess of $100,000 in salary, with bonuses that in good years can exceed their salary.
Peras is famous for sitting down at 7:30 a.m. and not rising from his chair till the lull at 3 p.m. New York time. He’ll waggle a bill at an assistant and say, “Get me some tube steaks.” When the hot dogs arrive, he’ll eat quickly and reimmerse himself in the screens.
Every world event seems to affect the FX market, even the weather. Today a blizzard is bringing the Northeast to a halt. Peras closes the spot desk at noon. For the roughly half-day’s work the desk shows a net profit in the range of $150,000-$200,000. Peras himself has made 60 deals, buying or selling a total of 350 million greenbacks.
“Peanuts,” he says, lighting a cigarette. “I’ll turn over a billion and a half dollars on a good day.”