Comments on: The 10 Largest Trading Losses In History http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html Freshly squeezed market commentary & analysis Sun, 22 Nov 2009 01:37:05 +0000 http://wordpress.org/?v=2.0.2 by: Courtney Malcarney http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html#comment-32213 Mon, 10 Mar 2008 20:25:12 +0000 http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html#comment-32213 Whenever speaking about derivatives, I think you should clarify between listed derivatives and OTC derivatives. It was OTC derivatives which bankrupted Orange County and brought down LTCM. The normal retail investor has no access to such contracts. Listed derivatives are largely safe from default risk (a huge concern in any contract) because of the OCC (Option Clearing Corp). When used properly derivatives can enhance one's portfolio. Whenever speaking about derivatives, I think you should clarify between listed derivatives and OTC derivatives. It was OTC derivatives which bankrupted Orange County and brought down LTCM. The normal retail investor has no access to such contracts.

Listed derivatives are largely safe from default risk (a huge concern in any contract) because of the OCC (Option Clearing Corp). When used properly derivatives can enhance one’s portfolio.

]]> by: Scott http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html#comment-32185 Fri, 07 Mar 2008 10:36:21 +0000 http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html#comment-32185 The Jerome K/SocGen affair has yet to fully play out. It'll be interesting to find out who actually was directly responsible for what losses. Near as I can tell so far from published reports, Jerome K didn't have a "realized" loss of $7 billion at the time his fraud was discovered (I think he had an unrealized loss of about $1.7 billion Euros, and we know that his trades actually generated a sizable "profit" in 2007). The bulk of that $7 billion loss was apparently "realized" when SocGen secretly had a "star trader" dump the position over the span of a few days, rather than try to "manage" the positions. We know from past scandals that patience, rather than panic selling, might have resulted in a profit (or, at the least, a smaller loss). I suspect we'll get more details when Jerome K's case goes to court...maybe. I can imagine there are lots of folks who would rather not see those details aired in public. The Jerome K/SocGen affair has yet to fully play out. It’ll be interesting to find out who actually was directly responsible for what losses. Near as I can tell so far from published reports, Jerome K didn’t have a “realized” loss of $7 billion at the time his fraud was discovered (I think he had an unrealized loss of about $1.7 billion Euros, and we know that his trades actually generated a sizable “profit” in 2007). The bulk of that $7 billion loss was apparently “realized” when SocGen secretly had a “star trader” dump the position over the span of a few days, rather than try to “manage” the positions. We know from past scandals that patience, rather than panic selling, might have resulted in a profit (or, at the least, a smaller loss).

I suspect we’ll get more details when Jerome K’s case goes to court…maybe. I can imagine there are lots of folks who would rather not see those details aired in public.

]]> by: links for 2008-03-07 :: Move the Markets :: Entries :: http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html#comment-32183 Fri, 07 Mar 2008 06:19:20 +0000 http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html#comment-32183 [...] The 10 Largest Trading Losses In History (tags: trading history) [...] […] The 10 Largest Trading Losses In History (tags: trading history) […]

]]> by: The Smart Money Report » Blog Archive » And you thought YOU’VE had some bad days… http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html#comment-32156 Thu, 06 Mar 2008 10:40:35 +0000 http://www.tradersnarrative.com/the-10-largest-trading-losses-in-history-697.html#comment-32156 [...] This is neither here nor there, but I thought it was interesting — “The 10 Largest Trading Losses In History.” Actually, there are some lessons to be learned. For example: If anything, such gigantic losses should, for once and for all, put a damper on conspiracy theories of market manipulation. After all, if someone can’t bully a market with a few billion, then the market is indeed bigger than anyone and everyone. [...] […] This is neither here nor there, but I thought it was interesting — “The 10 Largest Trading Losses In History.” Actually, there are some lessons to be learned. For example: If anything, such gigantic losses should, for once and for all, put a damper on conspiracy theories of market manipulation. After all, if someone can’t bully a market with a few billion, then the market is indeed bigger than anyone and everyone. […]

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