With a shaved head and fixed gaze, Todd Hanson still looks like a Marine. He drills military veterans in how to trade foreign currencies, ambushing the market at the most profitable moments.
CHICAGO — With a shaved head and fixed gaze, Todd Hanson still looks like a Marine. He drills military veterans in how to trade foreign currencies, ambushing the market at the most profitable moments.
“Right now, we’re just waiting and watching,” Hanson told a class.
His mission at WexTrade Financial is to build commodity traders out of ex-soldiers, underwriting their training with federal funds.
Settling even a small percentage of veterans into the futures markets is a highly unusual idea.
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Among the civilian jobs listed by the Veterans Affairs Department are nurse, truck driver, beautician and cemetery caretaker — with humble salaries compared with the millions of dollars a successful trader can command.
Still, the economic home front can be hostile to enlistees who once made life-or-death decisions and were responsible for protecting others.
“You’re used to being God for 20 people,” said Hanson, a winner of the Bronze Star. “You come back here, and the job market is flooded. You find yourself flipping Big Macs, wondering where your prestige went.”
Translating combat experience into market savvy has been an aggravating experiment for WexTrade. The Securities and Exchange Commission (SEC) last month charged its initial backer, WexTrust Capital, in a $255 million Ponzi scheme.
WexTrade severed connections with the private-equity firm, as Hanson and his partner, Jerry Considine, downgraded WexTrust’s status from being their parent company to that of a former potential investor. The SEC investigation does not involve WexTrade, they said, adding that they had no knowledge of WexTrust’s alleged activities.
WexTrade also is waiting to receive accreditation as a certificate program under the GI Bill, which would enable veterans to be fully reimbursed for enrolling in its $5,000-a-month courses. Disabled veterans already qualify for the reimbursements.
Of the 309,540 veterans who paid for their education through the GI Bill last year, just 14,513 attended a vocational program similar to what WexTrade offers.
The classes range from one to three months and are also available to those without military records.
The company has graduated students from three courses, leaving the biggest challenge ahead as those traders test themselves in the markets. A solid trader can land in the penthouse; a failed one in bankruptcy court.
Some graduates will land at WexTrade, dealing for the house account under the guidance of Considine, a commodity adviser with 27 years in the business. They will follow the models taught by Hanson, who received a Ph.D. in applied mathematics from the University of California, Berkeley, and designed trading software after leaving the Marine Corps.
On a recent Monday, Hanson marched through the classroom tucked into a Chicago skyscraper, his legs swinging and shoulders swiveling. He inspected the computerized charts drawn by eight students.
The charts showed movement on the euro, establishing a baseline for the currency relative to the American dollar. Any uptick above the baseline meant the students should buy, under the belief that the euro would appreciate against the dollar. Anything below indicated they should short the euro.
Buy once the euro hits $1.5605, Hanson said. The orders come in chunks of 100,000, putting the class a mouse click away from spending $156,050.
If the euro would slink up a hundredth of a cent, they could churn a quick $10 profit. If it managed to break $1.5705, the additional penny would earn them $1,000.
But the euro never budged. Students toggled over to charts for the yen, the Canadian dollar, the Australian dollar and the British pound.
One computer screen displayed no charts but the home page of the investment society at the University of Illinois at Chicago (UIC). Sitting in front of the screen was a star pupil: Paul Lee, an honorably discharged Marine staff sergeant who had served in Iraq and just returned from Manhattan, where he was a summer intern at the investment bank Lehman Brothers.
Lee, 25, grew up in Naperville, Ill. Lukewarm high-school grades produced nothing but rejection letters when he applied to college. He joined the Marines, completing two tours in the Persian Gulf as part of Operation Iraqi Freedom.
Lee handled logistics in the war: the transportation of troops, fuel and materiel through seaports and across desert expanses. Many lessons from his service parallel what he has learned in trading.
“You fall back on your training, looking for the signals, whether you should go long or short,” Lee said. “You look for your entry and exit points. You stick to your guns.”
Although he enjoyed his time at Lehman Brothers, such as when a trader bought the entire desk 1,000 White Castle hamburgers for lunch, Lee sees himself eventually running a proprietary trading firm or hedge fund. He will graduate in December from UIC, where he is chairman of the investment club.
The knowledge of how to profit from a hundredth of a cent is incredibly valuable, Lee explained, paraphrasing a quote from Archimedes, the ancient Greek mathematician and weapons engineer:
“With the right amount of leverage, I can move the world.”