Profile Bill Eyken: At home with the market

Dan Gledhill meets the man from Pebble Mill who cracked the secret world of derivatives
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The Independent Online
The scene could hardly be further from the sound and fury of the Square Mile or the hustle and bustle of Canary Wharf. Visitors to Bill Eykyn's Buckinghamshire home arrive along a winding lane, which insulates his 14-acre retreat from the buzz of the commuter belt. The slumber of his inattentive bovine guards is undisturbed and only the occasional honk of his geese disturbs the serenity.

Eykyn's estate is punctuated by a series of outhouses containing kennels for his wife's dogs. But one building, barely 15 feet square inside, is home to a rather different business. There, a lean, angular figure crouches over a couple of computer screens carrying complex charts of derivative prices. In the background, CNBC relays the latest news from Wall Street. The office doubles as a thoroughfare for the dogs, including the resident TV star Charlie, a golden labrador who starred in the Andrex toilet tissue adverts. But the canine traffic does not distract Bill Eykyn as he plots his next assault on the world's biggest derivatives market.

"I've normally got dogs all around me; they just wander in and out," he says. "It doesn't worry me because I'm too busy trading."

Eykyn may cut the image of a City slicker in his navy pinstripe suit, but that is only because of his appearance in court that morning in one of his other guises as a local magistrate. His preferred working garb is a casual shirt and jeans, one of the many perks of his alternative lifestyle. "You don't have to get in a car, you don't have your boss breathing down your neck, and you can work when you want," he says.

Eykyn is one of a growing band of laymen who have taken up a job more associated with Essex barrow boys and Oxbridge-educated rocket scientists. After almost three years spent trading bonds, he believes he has gone some way to unlocking the secret to making money in the US Treasury bond market. Treasury bond futures, which are traded from a pit the size of several football pitches in Chicago, are the world's most heavily transacted derivatives, with daily turnover worth $45bn (pounds 29bn). But Eykyn, in the rather more genteel setting of the Home Counties, has brought out his own book, A Hard Way to make an Easy Living, to explain how individuals with no experience can make a relatively safe living trading T-bonds if they follow his rules.

A journalist by training, Eykyn earned his 15 minutes of fame as the resident home improvement specialist on Pebble Mill, the Birmingham-based BBC1 lunchtime show. With the demise of Pebble Mill in the early 1980s, Eykyn wrote a book called Enlarging Your Home, before deciding on a change of career. A casual conversation tempted him to try his hand at the markets, although he cannot remember quite why. After attending a course that promised him the world, he was let loose trading options on the FT-SE 100 index.

"Over a slow and horrid period I managed to lose all the money I had set aside for doing this," he says philosophically.

Undaunted, he embarked on another "foolproof" trading system, with similar consequences. "You get to the point when you're not quite sure what's wrong; all you know is that the market is always beating you. It takes some time to dawn on you that there can't just be a mechanical system. If anyone had that, they would be millionaires in their own right. The last thing they would want to do would be to sell their system."

His perseverance was rewarded after a visit to the US to attend yet another trading course. He was recommended a book about a turn of the century stock dealer called Jesse Livermore, who made his fortune by "reading the tape", market-speak for studying price movements to spot patterns likely, but by no means certain, to repeat themselves in the future.

Equipped with a method, all Eykyn needed now was a market to trade. He opted for the US Treasury bond market, which had the right combination of volume and volatility for him to be able to execute his trades at leisure. He warns people to steer clear of trading more dangerous markets such as the FT-SE 100, as he learned from his own bitter experience.

His method, detailed in his manual, does not pretend to be an alchemist's guide to minting a fortune out of the markets.

"Mine is a method, not a system. After a long period studying the market you can see that it moves in a very measured way. My method doesn't work every time, but it works enough. To minimise your potential losses, the key is knowing when to be in the market and when not to be."

A sign on the wall imploring him to "Risk Not Thy Entire Wad" serves as a constant reminder that minimising losses is his bottom line. He is scornful of those who would have people believe that there are no inherent dangers in the game.

Eykyn says: "Some of the motivation for writing my book was to get my own back on all the people who screwed me up by telling me surefire ways to beat the market."

His trading day starts at 1.00pm, preparing for the Chicago market to open 20 minutes later. It closes at 8.00pm, although he is sometimes long gone. "If I've taken enough out of the market, I don't try to push my luck and take a lot more."

Eykyn's start-up costs were limited to the price of a satellite dish, to relay the information from the US, two boxes to channel the data and a couple of computer screens. Including the obligatory pair of telephones, for placing orders with his Chicago-based broker, his monthly bill comes in at about pounds 250. His profits, however, remain a trade secret.

"This has only come about in the last couple of years with satellite enabling you to get a feed from the States at a price where the ordinary person can get it in their home."

His equipment comes from Data Broadcasting Corporation, a Nasdaq-quoted company with a London office, which specialises in providing up to the minute financial information for domestic traders. Sales have prospered as more and more traders who have lost their livelihoods in the recent City job culls decide to set up at home.

Eykyn's fame is spreading, albeit slowly. DBC holds regular seminars to propagate his methods and a web page detailing his latest market views is under construction. Even the professionals are impressed. Patrick Collier spent more than 10 years in dealing rooms before retiring to set up a fund he trades from an office in the garden of his Hertfordshire home.

He says: "For the inexperienced trader or anyone trading from home, Bill's book is an invaluable tool which gives you a head start but doesn't claim to be a foolproof system."

But Eykyn is at pains to stress that trading from home is more than just a lifestyle choice for City types who have tired of the rat race. "When people are almost over the hill at 40 and you're in real trouble if you're over 60, it really is a great opportunity."