Andy Krieger - the best Forex advertising
Most people do not want to devote their lives to trading on the stock exchange; they just want to earn a lot of money.
Therefore, reports that someone has made millions from literally one transaction are always very popular.
Almost everyone knows the story about George Soros , who earned a billion dollars in one day, but almost no one knows the record of another investor.
Andy Krieger earned a little less, all 300 million dollars in one day of trading, thanks to this record he was recorded as a famous trader.
Andy’s biography is not particularly original; he was born in 1956, graduated from high school, and a few years later got a job at Solomon Brothers.
It was Solomon Brothers that at that time became a school for many future financial magnates, as the company accepted people from the street and taught stock trading.
Moreover, if in his previous job his main focus was on trading bonds, then at Bankers Trust the absence of strict frameworks allowed him to direct his efforts to other assets.
One of Andy's directions was options on currency pairs, they brought him worldwide fame.
The history of the deal itself
First of all, it should be noted not the amount of earnings, but the fact that 300 million were earned from a deposit of only 35 million dollars.
That is, literally in a day the deposit was increased more than 8 times. October 1987 was marked by a huge collapse of the Dow Jones Industrial Average, which caused unprecedented movement in all markets.
Investors transferred funds from one asset to another hoping to save their money from depreciation. As a result, an increase in sales transactions contributed to a decline in the rates of even seemingly stable monetary units, let alone unstable currencies.
In his strategy, Andy Krieger used a rather cunning approach; he chose to work on the USD/NZD currency pair with a small trading volume and the rate of which could really be influenced, unlike the most popular currency pairs .
In addition, according to his estimates, the New Zealand dollar in October 1987 was overvalued and had every chance of declining.
As a result, a purchase transaction was opened on the USD/NZD currency pair (that is, the New Zealand dollar was sold) in the amount of 15 billion US dollars, which served as an impetus for the start of a downward trend.
And it led to a fall in the New Zealand dollar by 5%. It would seem that there is nothing surprising here, so to speak, a classic of stock trading, when a major player himself forms the market.
But with a capital of 35 million you cannot be a major player. Andy was helped out by a huge leverage , which was calculated to be about 1:500, that is, the trader carried out a transaction that had simply a huge risk.
As a result, earning an amount of 300 million dollars. Perhaps it was the fact of excessive risk that became the main reason for Andy Krieger's departure from Bankers Trust, although other reasons were also given.
Andy himself stated that he was offended by the company because of a small bonus of only $3 million, and the company stated that about $80 million had disappeared from its accounts and hinted that Andy could have done it.
After leaving Bankers Trust, Andy Krieger worked for several months at George Soros's fund, and the most interesting thing is that Soros himself used a similar strategy 5 years later in 1992 when attacking the Bank of England, which brought him a billion in profit.
Then he participated as a founder and manager in various investment funds, but Andy Krieger was never able to repeat his 1987 record.