Nick Leeson, who is played by the excellent actor Ewan McGregor, starts off working in Indonesia for Barings Bank, but eventually works his way up, and becomes a trader on the floor of SIMEX, the stock exchange in Singapore.
Nick's job is to trade futures and options on behalf of Baring's clients. These contracts, are traded in what is called a pit, where floor traders yell and gesticulate at each other in a large open area of the exchange. Nick hires a bunch of people to be floor traders for him, and he has to train them.
Nick explaines that futures contracts "are about timing, they're about buying and selling at the right time."
Unfortunately for Nick, the trades he makes only exacerbates the problem, and the losses only mount. Nick then begins selling options on the Nikkei, hoping to generate enough premium to conceal his losses. He sets up a short straddle, which means that he is betting that the market will not experience much volatility in the near term.
However, to Nick's chagrin, Tokyo experiences a major earthquake the next day, and the volatility on the Nikkei explodes, which means that the losses on his short straddle would have been immense.
After the earthquake, stocks did not fall that much right away. There was a sort of time delay, a sort of calm before the storm, before the Nikkei really started to plunge. This, by the way, was the exact same thing that happened to stocks in the United States during the 1904 San Francisco earthquake.
Anyway, as Nick's losses mount, he keeps betting that he will be able to trade out of them. In a desperate and futile attempt, he tries to buy enough futures contracts to actually move the market in his favour by himself.
"Come on, let's move this market!"However, as the market slides further against Nick, the management at Barings start to clue in to what is going on. Nick now realizes that it is game over, and he and his wife try to escape Singapore, and head back to Europe.
On the flight home, Nick is spotted by the police, and apprehended. Ultimately, he ends up spending nearly five years in a gang infested prison in Singapore for unlawful trading and forgery.
What I liked about this movie was the excellent acting by Ewan McGregor, and also by the actors who played Nick's management. Furthermore, the movie is really fast paced, and really well directed.
This movies delves deep into the emotional aspects of trading. You can certainly learn a great deal by watching this movie. It will show you the danger of letting fear and greed cloud your judgement, and it will show you the price you pay for fighting the trend, and not cutting losses.
If you are interesting in trading stocks or futures, then I would say that this movie will interest you as well, in all likelihood. If you wish to see a trailer of this movie, then please refer to the following post.
Overall Rating: 10/10
