Bona Fide Hedge

The accounting firm of Schwartz & Schwartz employed Leo Logan as a clerk in their local office. There was nothing remarkable about Leo other than the fact that his father, Zachery, had made a deal with the Devil years ago, where Zach would win more bets than he lost in exchange for sacrificing his immortal soul to the Devil upon his demise.

               Zach was a cigar-smoking professional gambler, and because of the deal mentioned above, he could provide a modest living for his wife, Marcie, and their son, Leo. Marcie had to supplement their income by working as a part-time cocktail waitress at a local watering hole called the Club Tip-Top. Marcie was attractive in a slutty sort of way and hated it when her ass got pinched, or her breast got squeezed. In short, Marcie loathed her job.

               When Leo was born, Zach and Marcie vowed to give him the means to avoid the sporting life they had fallen into. They saved their money, and when Leo graduated from high school, they sent him to a local community college. Two years later, Leo received an associate degree in finance and landed his job at Schwartz & Schwartz.

               During his employment, Leo befriended Linda Schwartz, daughter of one of the partners. Their friendship blossomed from platonic to something more romantic as time went by. The Schwartz family wasn't thrilled with Linda's relationship with Leo. They considered Leo's parents, Zach and Marcie, lower-class citizens who drank, smoked, and gambled and contributed nothing to society.

               Zach was eventually diagnosed with inoperable lung cancer and soon wound up on his deathbed at the local hospital. Leo was at Zach's bedside when Zach motioned his son to lean closer. His voice was barely a whisper when he told Leo about the deal he had made with the Devil and warned him that the Devil would be coming soon to offer the same arrangement. Zach begged his son to turn the Devil down.

               After Zach passed away, Leo told Linda about what his father had whispered to him. They wrote it off as the mad ramblings of a dying older man and thought no more about it until one day in the Schwartz & Schwartz cafeteria.

               Leo and Linda were having lunch at their usual table, enjoying each other's company, when a man suddenly materialized. He was dressed in a black suit with a black shirt and black tie and wore a black bowler hat on his head. He sported a black, neatly trimmed van dyke beard. He smiled and snapped his fingers, and a plate of deviled eggs appeared before him.

               The man crossed his legs and smiled. "Good afternoon. Mind if I join you?"

               "Do I know you?" Leo frowned.

               "Please call me Mephistopheles or Lucifer if you prefer. I also answer to Prince of Darkness, although that's a trifle pretentious. I assume your father briefed you on the arrangement or deal under consideration. Have you reached a decision?"

               Leo and Linda stared at him, dumbfounded.

               Mephistopheles picked up a deviled egg. "Sorry to push you, but I'm somewhat pressed for time. I have several more stops to make today. Mostly fantasy football addicts and suckers trying to beat the NFL point spreads. So, Leo. May I call you Leo? What's it gonna be?" He popped the deviled egg into his mouth.

               Leo stood. "The answer is no. No deal. Please leave us alone."

               Mephistopheles' smile vanished. He chewed the deviled egg thoughtfully, then dabbed at his mouth with a black handkerchief. "As you wish. However, be aware that the minions of hell will curse you, and you will never win another wager as long as you live. Coin flips, poker hands, sports bets, para-mutual horse wagering, etcetera, etcetera. The curse is all-inclusive and non-reversible." He turned toward Linda and tipped his bowler hat, revealing two small horns protruding from the top of his head. "Afternoon, Ma'am," he smiled, then vanished, leaving a small black cloud with a scent of sulfur in his wake.

                               Leo and Linda sat silently, staring at each other for several seconds. Then Linda reached under the table and grabbed her handbag. She rummaged through it and pulled out a coin. She looked at Leo. "Call it."

               "What?" Leo said.

               "Heads or tails," Linda prompted.

               "Um, heads," Leo said.

Linda flipped the coin. It bounced on the table and settled. Tails. She grabbed the coin. "Again."

"Tails," Leo responded.

Linda flipped the coin. It bounced and settled. Heads.

She grabbed the coin. "One more." She flipped it.

"Heads or tails!" Leo shouted.

The coin bounced on the table and spun, coming to rest standing on edge.

"I'll be damned," Linda mumbled.

Linda and Leo called in sick the next day and headed for the local thoroughbred racetrack. It was a cloudy, rainy day. "I don't know what we're doing here," Leo complained. "If I bet on a horse, it will lose. Big deal."

"Just humor me. Leo," Linda said. "Think of this as an experiment. Now go over to the window and bet the minimum to win."

"On which horse? There are nine of them in the race."

"All of them."

"Excuse me?"

"You heard me."

Leo shook his head but did what Linda asked. He returned to her with nine tickets to win.

The race started, and the thoroughbreds streaked through the first turn. It was close. Three horses were neck and neck entering the stretch. It looked like it was going to be a photo finish. Suddenly, a lightning bolt crackled from the clouds, striking a light stanchion near the finish line. The stanchion crashed across the track, blocking all the horses.

The lead horses reared up on their hind legs in panic. Several jockeys sprawled onto the turf; others struggled to maintain control of their mounts. An announcement came over the P.A. system canceling the race and announcing that para-mutual tickets could be turned in at any window for a full refund. The announcer added that the track was closed until further notice.

The scent of sulfur in the air was unmistakable.

Leo drove on the ride home. Linda threw her arm around him and kissed the side of his face. "Do you know what this means?" She gushed.

"Yeah," Leo replied. "It means they can sue us if they find out our stupid experiment caused it."

"No, silly. It means we're rich. Filthy, stinking rich."

"How do you figure that?"

"Look, the Chiefs are playing the Giants on Sunday, right?"

"Yeah. So?"

"If you make a small bet on the Giants, what will happen?"

"The Giants will lose. Guaranteed."

"Right. Now, what if I simultaneously make a large bet on the Chiefs?"

Leo's eyes widened as the scheme's implications finally dawned on him. "Linda, you're a genius!"

"Goddamned right. When life hands you lemons, make lemonade."

Leo and Linda embarked on their gambling scheme. After football season, there was basketball and hockey, then baseball and tennis, then football again. They made enough money to buy a brand-new house for Leo's mom, Marcie, to retire into, plus they pledged enough money to build a new cancer wing for St. Jude's Children's Hospital. The new wing, when completed, would be named after Leo's father, the Zachery Logan Oncology Pavilion.

The Schwartz family changed their opinion of Leo and his family following the announcement naming the new Oncology wing after his father. He became the golden boy of local society, and when Leo and Linda exchanged vows and tied the knot, their wedding was the season's social event.

Their new prestige became threatened when all the sports betting houses refused to accept any more action from Linda because she never lost. Everything Leo and Linda had built, including the proposal for the new Oncology wing, was in jeopardy. Linda was devastated. Leo proposed a solution. "What about using the Bona Fide Hedge strategy on the stock market instead of sports betting?"

"What's a Bona Fide Hedge?" Linda asked.

"I learned about it in one of my Finance classes," Leo explained. "It's when you spend a little bit on option premiums to protect a big investment in the actual stock."

Linda frowned. "Example?"

"Sure. Suppose Apple is about to launch a new iPhone, and you think the stock will take off. You want to invest one hundred thousand in Apple stock, but you're afraid that you could lose a bundle if something goes wrong and the stock price tanks. So, to protect yourself, you buy put options with a strike price that will rescue you if the stock's price crashes. It's like insurance."

Linda frowned, deep in thought. "So, you buy a small amount of put options, guaranteeing the stock price will go up … "

Leo smiled. "Exactly. And you load up with a long position on the actual stock. If the SEC ever questions us, which I doubt because what we're doing is small potatoes to them, we say we're using a Bona Fide Hedge strategy. It's all perfectly legal, and they'll never block us from buying and selling stock on the open market. I have an old friend from finance class named Brad Kelley. Brad is a failed writer who makes his living as a licensed stockbroker. He can make the transactions for us."

Linda hugged him. "This time, you're the genius."

They set up accounts with Brad Kelley and embarked on the Bona Fide Hedge strategy. It worked even better than the sports betting plan. They were able to bring in profits that, to them, were enormous but were nothing more than a bug on the windshield of the SEC keeping tabs on Wall Street, the world's largest casino. Leo and Linda flew beneath the radar, piling up profits until the Zachary Logan Oncology Pavilion was becoming a reality. They met regularly with Brad at the Club Tip-Top to celebrate their market success with martinis. Brad knew nothing about Mephistopheles and the curse. He thought Linda was the modern-day she-wolf of Wall Street.

Leo went back to school and earned a CPA degree. Linda was elected CEO by the Schwartz and Schwartz partners. She immediately promoted Leo to Vice President. They went to their favorite restaurant one night to celebrate their good fortune.

They were sharing Chateaubriand for two, enjoying a bottle of chilled Dom Perignon that stood in a bucket of ice at the side of the table. They clinked glasses and stared into each other's eyes, deeply in love. Everything was coming up roses in their lives.

That's when Mephistopheles decided to pay them a visit.

He silently materialized at their table wearing his customary black suit and matching bowler hat. A plate of deviled eggs appeared in front of him.

Mephistopheles smiled sardonically. "Well, isn't this cozy? Just like old times. I see you've traded up from the Schwartz and Schwartz cafeteria. I hope I'm not interrupting anything." He popped a deviled egg into his mouth and dabbed at it with his black handkerchief.

"What do you want?" Leo demanded.

"In the world of jurisprudence, there's often a clear distinction between the letter of the law and the spirit of the law," Mephistopheles replied. "This also holds true for curses."

"What the hell does that mean?" Leo asked, clearly becoming irritated.

Mephistopheles frowned. "Please don't disparage my habitat. You see, the spirit of the curse is to cause you grief and misery. Unfortunately, you and your better half, Linda, figured out a way to follow the letter of the curse but achieve the opposite of the spirit of the curse."

"Yeah. So?" Leo asked.

"At first, I applauded your creativity," Mephistopheles continued. "I thought it was charming when you bought the house for Marcie. She suffered enough at the hands of that lout Zachary."

"He was my father!" Leo shouted.

"He was also a lazy loser who thought he could avoid working a normal job by making a deal with me, condemning poor Marcie to the Club Tip-Top, where she labored for slave wages delivering booze to dullards who pinched and poked her with nightly with ever-increasing relish. But that's not why I'm here."

"Why are you here?" Linda asked.

"I must draw the line at your use of the curse to fund the construction of the new Oncology Wing. Especially when you want to name it after Zachary Logan."

"But it will help kids with cancer! It will alleviate human pain and suffering." Leo pleaded.

"Exactly," Mephistopheles responded. "Probably why it makes my skin crawl. I am, after all, the Devil. I'm in the pain business. Effective immediately, I am lifting the curse. Like any normal person, you will go through life, winning some and losing some. As for the positions Linda currently holds in the stock market, and I understand they are quite substantial, they will float up and down unencumbered by the curse's protection."

"You can't do that," Leo said through clenched teeth.

Mephistopheles laughed. "Seriously? And why not?"

"Because, and I quote, 'This is all-inclusive and non-reversible. Those are your words."

Mephistopheles smiled and raised his hands. "You got me, Leo. I lied." Then he vanished, leaving a black cloud and whiff of sulfur.

Leo and Linda stared at each other for a long minute. "What are we going to do?" Brad said, his voice no more than a sad whisper.

Linda whipped out her cell phone and dialed. "Hello, Brad? Something's come up … "

"I'm glad you called, Linda. I was just about to call you." Brad replied. He sounded nervous.

Linda put him on speaker so Leo could hear. "You were? Why?"

"As you requested, I invested your entire portfolio in that energy company," Brad explained. "You'll recall I advised against it. There was no reason to take that kind of risk. A few minutes ago, the news broke that, like Enron, the energy company you invested in kept corporate books that have nothing to do with reality. It's all smoke and mirrors. The stock plummeted like a body in cement dropped into the Hudson after a mafia hit. It's down to pennies on the dollar, and nobody's buying. The good news is Leo's put options are way up, but that's a drop in the bucket compared to your losses. Remember I told you those small put options were nowhere near enough for a Bona Fide Hedge. Not even close … "

Linda ended the call. "Leo … we're broke," she said as a tear rolled down her cheek.

The next evening, Leo and Linda met Brad at the Club Tip-Top to drown their sorrows. After several martinis, Leo and Linda told Brad about the curse put on Leo when he turned down the deal with the Devil, about Linda's idea to use the curse to make money with sports betting and then shoot for the big-time and fund the Oncology Wing for St. Jude with profits from the stock market. Brad stared at Leo with an incredulous look.

"Wait a minute," Brad said slowly, "You're telling me you met with the Devil … "

"Mephistopheles, right," Brad replied.

"… and he put a curse on you because you wouldn't sell your soul."

Leo sipped his martini. "Yep," he replied.

"… then he reneged on the curse because you two were using it to do something good?"

"That pretty much sums it up." Linda nodded.

Brad smiled, "Guys … I have an idea."

Over the next several days, Leo and Linda spent countless hours in Brad's apartment, relaying their story while Brad typed away on his laptop. Whenever he finished a chapter, he printed the pages for Leo and Linda to review and polish. It took several weeks, but finally, the manuscript was ready for the publisher.

"We need a dedication page," Brad said.

Leo and Linda exchanged a look. "Zachary and Marcie Logan," Linda said.

"And Mephistopheles," Leo added.

               * * *

               Bona Fide Hedge by Leo and Linda Logan, as told by Brad Kelley, became a bestseller. It was marketed as fiction because the publisher said, "Nobody will ever believe this happened, including me." Paramount purchased the movie rights for seven figures. The President cut the ribbon to open the new Zachary Logan Oncology Pavilion at the children's hospital.

               The movie won an Oscar for Best Adaptation. Leo, Linda, and Brad took the stage at the Dolby Theatre in Hollywood along with the rest of the film's cast and crew as the director received the Academy Award statuette.

Nobody noticed Mephistopheles as he appeared next to Leo on the stage during the standing ovation. He wore a tuxedo of all black with a black bowler hat on his head.

               "This wasn't the idea, Leo," Mephistopheles whispered, "Not the idea at all. I'm pissed off. I think I'll burn the fucking Dolby Theatre to the ground."

               "Now, now. Don't be a sore loser, Lucifer," Leo whispered back. "After all, they got Al Pacino to play your part."

               Mephistopheles vanished.

Everybody on stage wondered where the faint scent of sulfur came from.