A high-stakes trader with a passion for Ferraris and high-risk transactions not surprisingly made the papers when he suffered a massive loss from extreme leverage 11,000 times his stake. His bold move wiped out of billions in just hours and left balking financial professionals at the sheer recklessness of his tactics.
The trader entered the market with complete confidence, betting heavily on a short-term bond movement. He used borrowed money to magnify his potential gains, but the market moved harshly against him. Instead of bagging quick profits as he meant to do, he caused one of last year’s biggest trading losses.
Insiders said the trader ignored numerous warnings from colleagues and pressed for greater leverage. He thought the market would correct in his favor, but every tick against his position increased his loss. Thus within minutes, his complete portfolio had gone under.
