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In a message dated 10/26/2000 11:02:44 AM Central Daylight Time,
gm@xxxxxxxxxxxxx writes:
<< Now, having written that, I'm ready for anyone's war story that proves me
wrong - how a trader made a million $ in a couple of minutes in a limit
market.
>>
Gerald,
There were no limits in 1987 but I believe Lewis Borsellino did achieve the
feat you describe in less than 1 minute. The words that follow are his - not
mine:
"I've told this story dozens of time, but the memory has never ceased to have
an impact on me. I was out of the country on Black Monday of the Crash of
1987. In fact, I wasn't able to get back to the trading pit until Tuesday
afternoon (even though I flew standby on the Concorde). I made six-figure
profits on Tuesday afternoon and Wednesday. But that all paled in comparison
to what happened on Thursday.
Before trading began, the pit was tense. The brokers, I noticed, were
especially nervous. Having been a broker in my early days, I could read their
body language clearly. They were acting as if they had a large order to fill.
Just before the bell rings, brokers start to make their offers. A broker
offered to sell S&Ps 4.00 points lower. (In the pit we'd think of that as 400
points lower.) Then another broker, this time from Shearson, said he was
10.00 lower. (Remember this was 1987, and we didn't have any limits to act as
brakes on a sharply falling market.) This was unbelievable, I thought! Within
seconds we were already 10.00 points down. As a local, I wondered just how
far down this market would go.
"I'm 20.00 lower," I yelled out.
A Shearson broker was lower still - 30.00 points lower. I said I was 40.00
points lower. The Shearson broker shot back that he was 50.00 lower.
S&Ps opened 56.00 points lower. In the midst of this freefall, I knew it had
to be the bottom. I turned buyer. I bought 150 contracts from a broker behind
me and sold them two seconds later for 20.00 points higher. I walked out of
the pit with a $1.3 million profit made in less than a minute. I went into
the bathroom and threw up. As much as I had made on that one trade, I could
have lost if the market had turned against me."
Rgds,
Kim
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