I finally watched the Nick Leeson movie, Rogue Trader (1999), and it was pretty good. It offered an interesting look at the raw exchange auction process back in those days, how the big guys made a lot of their money off pure arbitrage, and a lot of the floor traders really didn't know what they were doing.
Summary
Leeson basically attempted to make money by pushing the Nikkei futures by brute force each day, and had to increased order size exponentially to maintain the deception of consistent profits. He was able to do it as there wasn't a separate entity keeping the books at his office. Of course inevitably, it all came crashing down. He single handedly caused the fall of Barings Bank.
Some beliefs confirmed through the movie
Summary
Leeson basically attempted to make money by pushing the Nikkei futures by brute force each day, and had to increased order size exponentially to maintain the deception of consistent profits. He was able to do it as there wasn't a separate entity keeping the books at his office. Of course inevitably, it all came crashing down. He single handedly caused the fall of Barings Bank.
Some beliefs confirmed through the movie
- Making money in this game is about grinding out profits while maintaining risk limits
- Proper book keeping is CRUCIAL, i.e. know your EXACT delta, gamma, vol exposure
- Fraud is bad.
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