12-Year-Old Learns Perils Of Day Trading In New Novel

Jul 24, 2013

In her new book for young adults, “The Short Seller,” Elissa Brent Weissman gives us the ultimate “short seller”: 12-year-old Lindy Sachs (excerpt below).

Math bores her until her father starts teaching her how to trade on the stock market.

When Lindy is home sick with a bout of mono, he gives her her very own account and $100 to invest however as she likes, and she quickly gets in over her head.

Once she can see the way math works in the real world, she becomes a stock trading whiz, using all the graphs and math data.
–Elissa Brent Weissman

Weissmann’s first run-in with the thrill of day trading came when her husband asked her to complete an online stock transaction from home.

An exciting idea

After a few clicks and pressing the “refresh” button a couple of times, Weissmann saw her money grow before her eyes.

Although she doesn’t come from a financial career background, the experience got the wheels spinning about how volatile and exciting the world of day trading could be.

“I knew that stock prices went up and down throughout the day, but I had no idea that they changed so quickly — like every second,” Weissman told Here & Now. “I thought to myself, ‘If I bought 10,000 shares right now and sold in 10 seconds, I could make tons of money. Given the way my mind works, I thought anybody could do this and a kid could do this.”

The plot takes a turn

Over the course of the novel, Lindy sinks deeper into trading starts neglecting her friends. Weismann and Here & Now host Jeremy Hobson likened it to the anti-social-yet-social behavior prevalent today, thanks to perpetual connectedness.

“You see parents pushing strollers while they’re talking on phones, families out to dinner, grown adults you know are out with each other but not really out with each other because they’re on mobile devices,” Weissman said. “I think it’s a part of the story. Lindy happens to get involved in day trading, but that really could be a stand-in for anything.”

Girls and finance

Weissman says her intention is not to teach anything with the novel, however, “if it get some girls interested in math that would be great.”

“Lindy in the beginning of book considers herself to be really dense at math — she’s being moved down from the advanced to regular class. Once she can see the way math works in the real world, she becomes a stock trading whiz, using all the graphs and math data, and she sees how important it is. If it gets some girls interested in thinking that finance is something they could do, it would be great,” Weissman said.

Book Excerpt: ‘The Short Seller’

By Elissa Brent Weissman

Chapter 9: Day Trading

Lindy spent the next morning in a blur of stock trades.  She found a stock that cost only $1.16 per share, and she bought ten shares.  She sold them thirty minutes later, when it was up to $1.25 share.  It wasn’t a big profit, but it felt good.  Her confidence growing, she bought 25 shares of a stock that cost $2.03 a share, but it went down every time she hit Refresh for twenty minutes, so when it went up, briefly, from $1.85 to $1.89 she sold it all, even though she took a loss.

After lunch and a half hour of English homework, she found a stock called FHY that had been steadily rising all morning and was now at $3.15 per share.  After five minutes of talking herself into it, she took a deep breath, crossed her fingers on the mouse, and put through an order for 19 shares–$60 worth.  She tried to stay awake to watch it, but her illness was putting up a strong fight, weighing down her eyelids and increasing the gravitational pull of her bed.

She awoke with a jolt when she heard the garage door open.  FHY! she thought.

She reached for the laptop, but it wasn’t on her nightstand.  FHY! she thought again.

“Tracy!” she yelled.  She could hear her talking on the phone through the wall.

“We should probably work on it at your house,” Tracy said.  “My sister has mono.”

“Tracy!” Lindy said again.

“Yeah, right.  She’s only twelve,” Tracy said into the phone.  “I know it’s called that, but that’s because it’s passed through saliva.  You can get it from sharing a drink or something.”

Lindy listened and looked for something to throw at the wall to get her sister’s attention.

“Don’t even say that,” Tracy said.  “If she kissed someone before me, I’ll die.”

Lindy stopped to register that statement.  She smiled.  Then she chucked her pillow towards the wall.

Her dad opened her bedroom door in time to see the pillow crash against the wall and land in a pile of dirty clothes.  He raised his eyebrows.

“Sorry,” Lindy said.  “But Tracy took the laptop.  Can you get it for me?”

Mr. Sachs kept his eyebrows raised.  “Doesn’t Tracy have her own laptop?”

“Yeah, but it’s not here.  Tracy’s always taking things.”

“Hold on a minute,” Tracy said into the phone.  She dropped it on her bed and walked to Lindy’s doorway.  “First of all, I can hear you, you know.  Number two, you’ve got mono, not two broken legs.  You can get out of bed and get things for yourself.  And three, yes, I have my own laptop, so stop accusing me.”

“Then who took it?” Lindy asked as her father backed away.

“I did,” her mother replied, appearing in the doorway with the laptop in her hands.  “It is technically mine.”

“Well,” said Mr. Sachs.  “It’s technically both of ours.”

Lindy felt her face turning red.  “Sorry, Mom.  But do you think I can use it?  I want to check something.”

Mrs. Sachs handed Lindy the computer with a cautious nod.  “I’m going to put in a frozen pizza.  Dinner in fifteen minutes.”

Tracy cleared her throat.

Lindy sighed.  “Sorry for accusing you, Tracy.”

“Not forgiven.”  Tracy started heading back to her room.

“Oh, Trace?” Lindy said innocently.  “You know how you can hear me in your room?  I can hear you, too.  You know, talking about my mono and what causes it and everything.”  Trying not to smile, she opened the laptop and pulled up the browser.

Tracy took a moment to register the comment, then turned red herself and disappeared into her bedroom.

Mr. Sachs eased himself into Lindy’s room and sat at the edge of her bed.  “What’d you need to check, Lind?  We’re past the closing bell.”

“What does that mean?”

“It means there’s no more buying or selling for today.  Market’s closed.”

Lindy opened her eyes wide.  “It closes?  What time does it close?”  What if FHY was way up—or way down?  She couldn’t do anything about it because the market was closed?

“Four o’clock.”

“Four o’clock!” said Lindy.  “The mall is open till ten, but the stock market closes at four o’clock?”

Mr. Sachs laughed.  “It’s closed weekends, too.  But it’ll open tomorrow at nine-thirty.”

“Will the price of things be the same as when they closed?”

“For the most part.  Sometimes stocks jump up or go down first thing in the morning, but they usually stabilize within an hour or so.  And there’s after-hours trading, but that shouldn’t affect things too much.”

“After hours trading?” Lindy asked.  “How do I that?”

Mr. Sachs laughed again.  “You don’t.  What’d you buy?”

Lindy was silent while she logged into the site and waited for her positions to come up.  She prayed that she didn’t lose her $60 when she fell asleep.  I don’t need to make a lot of money, she thought, but please, please, please don’t be way down.

The screen loaded.  Lindy looked.  There was FHY, and it had a little green triangle next to it.  Relief flowed through her, pumping from her heart to her fingertips.  Her eyes followed the line across to see just how much it had gone up.  It was at $4.09.  It had gone up 94 cents!  Almost a whole dollar!  30 percent!  Her $60 had turned into $77.71!

“Hey,” said her dad, peering over her shoulder.  “You made seventeen bucks!”

Lindy grinned.  “I did.”

Her dad patted her on the back and left to complete his pre-dinner routine.  Lindy sat smiling at her portfolio.  Good thing I was asleep, she thought, or else I might have sold it when it was only up 50 cents, or 10 cents!  If only she’d spent her whole $100 instead of just $60.  Then she’d have made $30 instead of $17.  And if she’d spent $3000—what her dad had spent on that first stock she bought for him—she’d have made $900!  But I don’t have $3000, she reminded herself.  I have $100.  Then she smiled.  $117.71 now.

Guest

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JEREMY HOBSON, HOST:

It's HERE AND NOW. I'm Jeremy Hobson.

And there has been a lot of talk about babies this week - well, one baby in particular. But did you hear the one about the 1-year-old in Oregon who bought her father a car on eBay? Earlier this month, Portland resident Paul Stoute got the surprise of his life when he got an email announcing his winning $225 bid on a 1962 car. Paul soon realized that his daughter, 1-year-old Sorella, who loves to play with his smartphone, had gotten into the eBay app. And with just a few taps, she made the purchase. Here's what Paul told Portland TV station KPTV Fox 12.

PAUL STOUTE: I've been looking at cars with a friend of mine. I'm just like, oh, it would be cool if we could, you know, have this car, or this Porsche should be fun. You know, that kind of stuff. And luckily, she didn't buy the $38,000 Porsche. She got the $200 Sprite.

HOBSON: Luckily. Well, the seller offered to void Sorella's bid, but the Stoutes went through with the purchase, maybe a future present for the enterprising Sorella, and they have added password protection to their phones.

So with that in mind, listen to the subject of a new fiction book called "The Short Seller." It's about a 12-year-old whose father gives her his password to access his stock trading account and make a trade for him. The author is Elissa Brent Weissman. She writes about the astonishment from Lindy, that's the daughter, that money can be made so quickly.

ELISSA BRENT WEISSMAN: We made almost $1,000, she thought. If she made 20 bucks babysitting in one night, and she babysat four nights a month, and she got a cookie instead of a cupcake after school to save 50 cents, and she helped her neighbor rake leaves, all of that meant she can make about $100 in a month. If she did all of that for 10 months and she didn't spend a single penny of it, only then would she have saved $1,000. That was nearly impossible. And here she was making almost $1,000 in a couple of days. Her brain felt like it was fizzing.

HOBSON: Elissa Brent Weissman reading from her new book "The Short Seller." And Elissa joins us now from WYPR in Baltimore to talk about the book. Elissa, welcome.

WEISSMAN: Thanks so much.

HOBSON: So I have to say, looking at this book, reading this book made me think don't try this at home.

(LAUGHTER)

HOBSON: How did the idea of exploring the stock market through the eyes of a 12-year-old first occur to you?

WEISSMAN: Well, I almost got close to trying this at home myself. A few years ago, I was home and my husband called me from work and asked if I could make a trade in our online stock portfolio because the site was blocked at his office. I didn't even know that we had an online stock portfolio. And he told me how to login. And while I was there, I pressed the refresh button on the browser and the price of the stock changed by a few cents. And then I pressed refresh again and the price changed again by a few cents. And I knew that stock prices went up and down throughout the day, but I had no idea that they changed so quickly, like every second. And I thought to myself, you know, if I bought a thousand shares right now and I sold them in 10 seconds, I could make tons of money. And just given, you know, the way that my mind works, I thought, anybody could do this and a kid could do this. And that's where the idea for the book came from.

HOBSON: But you don't think that's a good idea, or do you?

WEISSMAN: No, not necessarily. I mean, I think that, you know, Lindy, in the book, gets $100 from her parents and access to the trading account that she can buy and sell as she sees fit. And I think that that could be a good idea for kids for sure. And whether they want to invest a little bit and watch it grow over the long term or they want to, you know, get into that high-stakes world of day trading, and they're trading with that $100 or $200, I think that that's fine. It's only when Lindy starts trading with her parents' money that things get really tricky, and I definitely don't recommend that to anyone.

HOBSON: The other issue that your book brings up for me is the issue of trust between the parent and the child, and there is a lot of trust here. Her father gives Lindy the password to his account, lets her make a trade for him and then later gives her some money to do the trading on her own. What does your book say about trust, do you think?

WEISSMAN: You know, some people also since the book has been out have said to me that they think it's totally crazy that her dad gives her the password to his online account. And that strangely enough perhaps never even occurred to me while I was writing the book because I think that my dad would have given me the password to his online trading account. You know, he trusted me unconditionally, and I was a very good kid. And I think that Lindy is a pretty good kid, too, who ends up, you know, doing some not-so-good things.

And I hope that people don't take away that we shouldn't trust one another. We shouldn't trust our family members. We shouldn't trust our kids, although maybe we do need to be very careful about what everybody is doing online.

HOBSON: One of the things that is so believable in this is the idea that Lindy, the main character, starts to neglect her friends to do this online trading. It doesn't have to be online trading, but I can certainly see young girls or young boys, for that matter, neglecting their friends for their computer or their mobile device or their tablet or whatever. I mean, that is something we all see all the time.

WEISSMAN: Yes. And not even young people, right? I mean, you see parents pushing strollers while they're talking on their phones or families out to dinner or grown adults, you know, are out with each other but really not out with each other because they're just on their mobile devices.

HOBSON: What about that? I mean, do you think that's a part of this story?

WEISSMAN: I think that it is to some degree, although Lindy happens to get involved in, you know, in day trading, but it could - that really could be a stand-in for anything. I think that in seventh grade, which is the grade that she's in, friendships are really changing a lot and shifting, and kids get into one thing and their friends aren't into that, and people drift apart and come back together and find new friends. And I think that that is something that goes on with everybody and that's something that goes on with her, and it's sort of heightened because of the story and because of her, what her new hobby becomes, it takes on that, you know, technological Wall Street bent. But it really could be anything.

HOBSON: What do you want to teach people with this?

WEISSMAN: I'm not really out to teach anything. And I just hope that people, you know, read this story and enjoy it and laugh in the right places. But I think that if it does, you know, get some girls maybe interested in math, that would be great. Lindy, in the beginning of the book, considers herself to be really dense at math, and she's being moved down from the advanced class into the regular class. And then once math has - once she can see the way that it works in the real world, she becomes, you know, sort of this stock trading whiz, using all of the graphs and all of the mathematical data, and she see's how important it is. I think that would be great.

If it gets some girls interested in, you know, thinking that finance is something that they could do, I think that would be great. And then, I think, too, that not just thinking about the way Lindy is doing her stock trading online, but sort of maybe opening up a discussion about the way that we all behave online, on a computer instead of in real life. You know, Lindy takes these outrageous risks because the money just is numbers on a screen. And I think that doesn't only apply to money, but to, you know, the things people say online and certainly the issues that we hear about a lot today with teenagers and cyber bullying and things like that. I mean, the way that we're willing to do things online that we're not necessarily willing to do in person.

HOBSON: In a very short time, in this book, Lindy is making some very sophisticated moves with her stock. She sells shorts. She's covering margins. How hard was it to sort of put these things into language that kids can understand?

WEISSMAN: I think in some ways it was easier because I don't fully understand them myself. And I figured that I only really needed to have the understanding that a 12-year-old would have. If anything, I will be - I'm very pleased if it comes across as Lindy having more knowledge and understanding than I do. If perhaps I came from the financial world and had worked on Wall Street myself, in some ways, maybe it would have been harder because I would have had this knowledge that I was trying to get across to young readers. But I was learning this along with her for the most part. And so, in that respect, I hope that I learned it correctly, and I think that I was able to communicate it at a basic level.

HOBSON: You have a couple of kids. Would you ever let them trade stocks at Lindy's age, 12 years old?

WEISSMAN: I don't know. My kids are really young. They're two and a half and seven months. So luckily, I don't need to think about that just yet. But if that were something that they were interested in and if we're in a very controlled situation, you know, if I were to set up the account, I would probably have a different password than the account with all of my and my husband's money. But I think that it's a perfectly legitimate hobby and something that certainly, you know, is educational and can be fun and risky in a good way as long as it's contained, sure.

HOBSON: Well, Elissa Brent Weissman, author of the new book "The Short Seller," which is truly about a short seller, 12 years old. Elissa, thank you so much.

WEISSMAN: Thank you.

ROBIN YOUNG, HOST:

Well, I'm wondering what parents think about that idea.

HOBSON: Yeah. Really.

YOUNG: Let us know, hereandnow.org.

HOBSON: From NPR and WBUR Boston, I'm Jeremy Hobson.

YOUNG: I'm Robin Young. This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.