Options: Barings Bank with Nick Leeson (ENG/TH presented)

OPTIONS

OPTIONSCallLong

OPTIONSLong Put

OPTIONSCallShort

OPTIONSShort Put

Trader Types

1. Hedgers2. Speculators3. Arbitrageurs

Take a paper

Let’s play a game

The Collapse of Barings Bank

Mr.Yossawat Chaiwong :5405106012

Barings Bank

“Britain’s oldest merchant bank” “Founded in 1762

Collapsed in 1995Total 223 years”

“from $500 M. to $1.60 !”

“Internal control”

Nick Leeson

“No.88888”

“Understaffed”“Unauthorized”

“Lost $296 M. From day one!”

How Leeson Broke Barings?

4Q 1994 - January 1995

January 17th, 1995

January 20th – February, 1995

February 27th, 1995

http://crackmba.com/short-straddle-trading-strategy/

“Middle Way”

Q&ASources: The Collapse of Barings Payoff Diagram,

Poems Derivatives, Asiaplus