Rogue Trader's job applicantion
Written by A Forex View From Afar on Thursday, January 24, 2008Back to www.thelfb.com
Got some guts and some dice? If you do, let's go and hire on a bank's trade desk.
Don't worry about the losses, we have dices to show us the right path and we have guts, and a lot to support those loses.
Today, Societe Generale Bank in Paris took one of the biggest loses recorded from rogue traders: $7.2 billion from a Paris based trader who was deeply involved in the European index futures. He used his back-office experience to hide his losses.
Looks like he didn't know about the 2% rule, which Forex traders should worship, especially retail traders.
Add to this, the credit market loses (read sub-prime) and you get the perfect case of a bank which depleted its capital and it's now looking for investors. $5.5 in their pockets, bank sources tells.
Remember Nick Leeson? It's one of the most known cases of a rogue trader. He bankrupted Barings Bank through trading frauds on Nikkei Futures. He hid his loses through an account named 88888, which ironically is considered a lucky number by the Eastern cultures.
Want to hear the similarity between Nick Leeson and Societe General? They both got awards and trophies for trading before the losses were discovered...
Despite what I said in the opening paragraph, trading for a trade desk is something very hard. Immense pressure, a lot of money flowing around, money which a person is unlikely to see all his life, that pressure is huge. But this still doesn't excuse these traders who fraud the system to hide loses.
Wikipedia provides us a Hall Of Fame with trading loses. Watch out, don't you make it on the list. See it here
Sources:
Bloomberg: Societe Generale Reports Record Trading Loss of EU4.9 Billion
BBC: Rogue trader to cost SocGen $7bn
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