“—As you know, the program uses a combination of advanced geometry and quantum computing to respond quickly to market shifts and improve the firm’s pricing of derivatives. It’s also been enormously helpful in the area of risk analysis—”
Sitting at his desk, listening to the young programmer speak, Matt shook his head slowly. As usual, he had no idea what the lanky quant was trying to tell him.
Matt turned and gazed out the window, looking down at the Midtown street. It was a little past three in the morning. He could see only a few cars moving along the cramped Manhattan streets.
He turned back to look at the nervous programmer, who was still speaking rapidly.
“—At first I thought it was maybe a glitch. Some kind of coding error—”
“Brad,” interrupted Matt. “It’s late, I’m tired, I want to go home. I don’t need the whole overview. Just get to the fucking point. Why am I here?”
Standing next to the wall-mounted screen, Brad Park hesitated.
“I think we have a problem with Freya.”
That made Matt sit up straighter.
Freya was the informal name of the firm’s electronic trading program, known officially as the High-Frequency Algorithmic Trading System. As lead programmer, Brad had gotten the first crack at naming the new piece of code. After a bit of deliberation, he had decided to call it Freya, either because he was a big fan of Norse mythology or because he’d realized that HFATS was a terrible acronym.
Matt didn’t have a problem with it. Actually, he thought the name was sort of perfect. Freya was supposedly the goddess of love and fine material possessions. She was basically the mythological incarnation of fucking and owning cool shit. What better deity was there to serve as the firm’s unofficial mascot?
“What do you mean?” Matt said. “I thought we just posted our most profitable quarter in a decade?”
“We did,” Brad said. “The problem isn’t whether or not Freya’s making us money. She is. The problem is how she’s doing it.”
Matt raised an eyebrow. “She?”
Brad shook his head. “It. Whatever. The point is, I was looking through the records of Freya’s trades, going back for the last year, and I think I’ve noticed an issue.”
“What kind of issue?”
Brad moved away from the screen, pacing back and forth across the tiny office. “When we originally wrote the program, we designed it so that Freya would react to miniscule shifts in the market. The point was to design an algorithm that could detect and respond to changes in price as they occurred, within microseconds. If the price of telecom companies started to dip, then the hope was that Freya would sell off our shares a fraction of a second before anyone else got the chance.”
“Yeah, and it does,” Matt said. “It’s doing exactly what you designed it to do.”
“Yes, it is,” Brad said, still pacing restlessly. “The thing is, about nine months ago, it looks like Freya began to expand beyond the parameters of its original program.”
Matt frowned. “Expand how?”
“Well, instead of just reacting to market changes, the system started predicting them.”
Matt looked up at the quant and cocked his head. “What?”
“I know, I was surprised, too,” Brad said. “As near as I can tell it’s been using historical trends and real-time monitoring of major news events to predict future price shifts. At first it was just anticipating them by a fraction of a second. But eventually, within a few months, as the system gathered more data, it started to anticipate events days or even weeks before they actually happened.”
“So how far ahead are these predictions now?” asked Matt.
“As of last week, Freya was projecting future events to a maximum of six months in advance.”
“And these predictions,” Matt said. “How accurate are they?”
“Well, the error rate was admittedly pretty high for the first few days,” Brad said. “But, within a couple of weeks, Freya was anticipating future shifts with an accuracy rate of 60%. As of last week, she’s up to 99.99%.”
“Holy shit,” Matt whispered.
Brad nodded. “Yeah.”
Matt leaned back in his chair. “Let me see if I’ve got this right. You’re telling me that we accidentally created some kind of quantum computing crystal ball that can see six months into the future with an approximate error rate of a thousandth of a percent?”
“That’s actually a great way of putting it,” Brad said.
Sitting behind his desk, Matt grinned. “So while everyone else is fighting over whose system can be the fastest to react, ours can predict price shifts half a year out?”
Brad shook his head. “No, you don’t understand. Freya isn’t just predicting market trends. She’s predicting everything.”
“What do you mean, ‘everything’?”
“You remember two months ago, right before that big hurricane hit the Gulf?”
“Well, eight days before it happened, Freya dumped every share we had in the Florida gulf coast real estate market. She also went long on shares of companies that do disaster relief for FEMA in that area of the country.”
“Wait,” Matt said, “you’re saying the fucking computer knew that a hurricane was about to flood a third of Florida?”
“I don’t know how it knew,” Brad said. “All I know for sure is that it did.”
For the first time since they’d started talking, the thin programmer stopped moving. “I went back through the trading records and checked. Freya has accurately predicted every political election, every sporting event, every natural disaster, for the last eight weeks straight. It’s basically just started anticipating everything. And by ‘everything,’ I mean literally—”
“Everything,” Matt said.
“Yeah.” Brad stared at him.
For a long moment both men were silent. Matt stood up from his chair. He walked around his desk and slapped Brad on the arm.
“Well, this is fucking amazing,” he said, his face breaking into a wide grin.
“Yes, it is,” Brad said.
“We can see into the fucking future.”
“Jesus,” Matt said, his smile somehow growing wider. “We are going to make stupid amounts of money.”
“Well, that’s kind of what I wanted to talk to you about,” Brad said.
Matt looked at him in disgust. The programmer still looked jittery and nervous. “Jesus, what the hell is the matter with you quants? Don’t you fucking guys ever celebrate?”
Brad frowned and stepped back toward the screen, swiping his fingers across the surface to advance the slide deck he had prepared. Immediately, a line graph appeared, showing a jagged line that sloped up before abruptly curving back down.
“What’s that?” Matt asked.
“That is the projected course of Freya’s trades for the next six months. Because the system can now anticipate events six months in advance, it’s been preemptively plotting its future trading positions.”
Looking at the graph, Matt frowned. “Wait, so why does it dip down like that at the end? It looks like it’s dumping all of our positions.”
“That’s because that’s exactly what the system is planning to do.”
Matt took a step back. “I don’t understand.”
Brad lifted a fist and touched it briefly to his lips. “The system is designed to maximize the firm’s profits. As a piece of software, that is its one and only purpose. Three months from now, Freya is planning to divest of all the firm’s saleable positions. It’s basically planning a massive sell-off. A fire sale, except that we won’t be broke. In fact, according to Freya’s projections, we’re going to be at our highest earning level ever.”
“So why is the damn thing planning to sell everything when we’re going to be making that kind of money?” Matt asked.
Brad shook his head. “I’ve asked Freya to play out the scenario at least a hundred thousand times. I’ve adjusted several different variables, changed discreet pieces of her code. Every time it works out the same way. She just goes and sells everything by October 7th.”
“So what does that mean?” Matt asked.
Brad turned to stare at the screen. “Well, as near as I can tell, it probably only means one thing. Freya doesn’t expect there to be a market to trade on by October 8th.”
“That doesn’t make any sense,” Matt said. “Why wouldn’t there be a market?”
“Could be any number of reasons,” Brad said slowly. “Maybe it’s some kind of global financial collapse that would basically make the markets irrelevant. Maybe some kind of cyber attack that wipes out global computer systems. Or maybe it’s something even worse.”
“You’re talking about the complete and utter collapse of the global economy as we know it,” Matt said softly. “What could be worse?”
“I told you, Freya’s been predicting natural disasters along with everything else. Maybe something happens in three months. Something . . . global.”
“Yeah, or maybe the fucking President dies and they close the markets for a national day of mourning,” Matt said.
“I already thought of that,” Brad said. “If this was just a temporary closure, Freya wouldn’t sell off all the firm’s positions. Whatever happens on October 8th, the system doesn’t anticipate the markets ever opening again. I think, whatever this thing is, it’s going to be something more permanent.”
The two men stared at the screen, looking at the downward trend of the graph.
“You said this thing is only 99.99% accurate,” Matt said.
“Which means there’s still a chance that this could all be wrong.”
“Maybe,” Brad said. “Although every time I ran the program, it came up with the same outcome.”
“Great,” Matt whispered.
For a long time, neither man spoke.
“Anyway,” Brad said. “That’s the problem. I just figured I should tell somebody.”
Matt looked at him incredulously. “So you told me?”
“Yeah,” Brad said. “You’re my boss. Freya is proprietary technology. She belongs to the firm. I didn’t know who else to tell.”
“I don’t know,” Matt said. “Maybe literally anybody else?”
Matt crossed the office to his desk and picked up his cell.
“What are you doing?” Brad said.
“I’m calling the fucking Mayor’s office. Or maybe the White House or the Department of Defense. Somebody who’s more equipped to deal with this kind of shit than the two of us.”
“Wait, stop,” Brad said, snatching the phone out of his hand.
“What the fuck?” Matt said. He reached for the phone, but the tall programmer held it up, out of reach.
“Look, if this is real,” he said, “then that means one of two things. Either it’s completely out of our control and there’s nothing we can do to stop it—”
“Or?” Matt interrupted.
“Or,” Brad said, “maybe we play some part in causing it. Maybe all of this, you calling the DoD, it’s all part of Freya’s prediction. Maybe the news leaks that the American military has acquired quantum computing technology that allows it to see six months into the future. Maybe other countries don’t like that so much. Maybe it makes them worried that we might use our knowledge of the future as an excuse to preemptively bomb the fuck out of them. Maybe they attack us first. You see where I’m going with this?”
Matt took a step back, leaning against the edge of his desk. “Holy shit,” he whispered.
“Yeah,” Brad said. “So let’s just calm down and wait a minute and think before we do anything.”
“What if you’re wrong?” Matt said.
“What do you mean?” Brad said. “About what?”
“What if Freya is counting on us not telling anyone? What if that’s what helps cause this?”
“I don’t know,” Brad said, turning to look again at the graph. He pointed at the end of the screen, where the line sloped down to approach zero. “Either this outcome is fixed, and nothing we do makes any difference—”
“Or we call someone and tell them and maybe stop the end of the world,” Matt said.
“Or we call someone and tell them and maybe cause it ourselves,” Brad said.
“Well, yeah,” Matt said.
For a moment, they stood in silence, both of them staring at the graph.
“So what do we do?” Brad said.
Matt let out a humorless laugh. “Honestly, I can’t think of a single person less qualified to answer that question than me.” He paused. “Other than my mother, maybe.”
“Okay,” Brad said. “I don’t disagree. But, we’re still going to have to make a decision here. As of this moment, we are literally the only two people in the world who know about any of this.”
“Right,” Matt said, shaking his head.
Matt considered the problem for a moment. In the end, the way he saw it, it came down to what you believed. Was the future truly fixed? Were all their actions really meaningless? Or could they do something to change it, nudge the line up or down? Could they, at the very least, keep it from dropping all the way to zero?
“So what do we do?” Brad said.
Matt stood and stared at the graph.
He stayed that way for a long time.
Image by Lorenzo Cafaro from Pixabay
5 thoughts on “Stocks and Futures by John Visclosky”
Intriguing and interesting paradox. Could easily be the seed for a novel.
Kind of a dilemma. I wonder if the computer could predict the personal futures of the two protagonists. That might help them decide what to do about Freya. Indeed, this seems like it could be made into a novel or a screenplay.
I have to admit a story about stocks and shares and AI would normally run me cold.
But this was very interesting, a clever premise and I thoroughly enjoyed your well thought out story.
Great premise. As others have commented, there’s definitely scope to expand further and play around with the concept. The quick-paced dialogue draws you in and ramps up the tension. A fun read.
There are a few stories on the site that you recognise and remember as soon as you see them.
This is one of those that sticks with you.
It’s great to see this in the limelight once again.
All the very best my friend.