Andy Krieger - the best Forex advertising
Most people don't want to dedicate their lives to stock trading; they simply want to make a lot of money.
Therefore, reports of someone making millions from literally a single trade are always extremely popular.
Almost everyone knows the story of George Soros , who earned a billion dollars in one day, but almost no one knows the record of another investor.
Andy Krieger earned slightly less, a full $300 million in one day of trading, a record that has earned him a place among famous traders.
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.
At that time, Solomon Brothers became the school for many future financial magnates, as the company hired people off the street and taught them stock trading.
Moreover, while in his previous job his main focus was on bond trading, at Bankers Trust the lack of strict framework allowed him to focus his efforts on other assets.
One of Andy's directions became options on currency pairs, and they brought him worldwide fame.
The history of the deal itself
What's most noteworthy isn't the actual profit, but rather the fact that the $300 million was earned from a deposit of only $35 million. In other words, the deposit increased more than eightfold in just one day.
October 1987 saw a dramatic collapse of the Dow Jones Industrial Average, triggering unprecedented movements across all markets. Investors shifted funds from one asset to another, hoping to protect their money from depreciation.
As a result, the increase in short-term trades contributed to a decline in the exchange rates of even seemingly stable currencies, let alone unstable ones.
In his strategy, Andy Krieger used a rather clever approach: he chose to work with the USD/NZD currency pair, which has a small trading volume and whose rate could actually be influenced, unlike the more popular currency pairs .
Moreover, according to his estimates, the New Zealand dollar was overvalued in October 1987 and had every chance of declining.
As a result, he opened a long position on the USD/NZD currency pair (i.e., sold the New Zealand dollar) worth $15 billion, which triggered a downward trend and led to a 5% decline in the New Zealand dollar.
This might seem unsurprising—it's classic stock trading, so to speak, where a major player shapes the market. But with $35 million in capital, you can't be a major player.
Andy benefited from enormous leverage , estimated at approximately 1:500, meaning he executed a trade with enormous risk. He ended up earning $300 million.
Perhaps this excessive risk was the main reason Andy Krieger left Bankers Trust, although other reasons have been cited.
Andy himself claimed he was offended by the company over a small bonus of just $3 million, but the company claimed that approximately $80 million had disappeared from its accounts and hinted that Andy might have done it.
After leaving Bankers Trust, Andy Krieger spent several months working for George Soros's fund. Interestingly, Soros himself employed a similar strategy five years later in 1992 during his attack on the Bank of England, which netted him a billion dollars.
He then became a founder and manager of various investment funds, but was never able to match his 1987 record.
