Another trader goes full tilt

[Talkbet]

http://www.bbc.co.uk/news/business-14927432

[CaerMyrddin]

Losing such an amount is beyond full tilt! What a mess...

[Iron]

What I don't understand is how he was able to place the trades in the first place.

In 2011, it must be easy to put in place systems that automatically prevent a trader from exceeding their exposure limit...

Jeff

[freddy]

I agree, it's madness that this is even possible .
Compleate incopetence

[Iron]

I tweeted Nick Leeson about the apparent lack of controls, and he responded: 'shocking jeff, financial innovation is all the banks care about, controls are for lesser mortals'.

Jeff

[Will Sharpe]

Remember, these are the incidents that are so big that they have to report them because of the apparent hit to the bottom line.

Imagine how many more examples there would be if you looked at the range below 100 MUSD .

There is an obvious relationship between risk and reward. As a trader you are not going to generate ginonourmos results unless you take on a corresponding risk.

Since most of these traders positions are correlated and/or used as hedges against each other there will always be room for error when assigning a value to a position or when judging the corresponding risk to the portfolio.