Rogue Trader
 |
Definition of 'Rogue Trader'A trader who acts independently of others - and, typically, recklessly - usually to the detriment of both the clients and the institution that employs him or her. Rogue traders typically trade in high risk investments which can create huge losses but also large gains. |
 |
Investopedia explains 'Rogue Trader'One of the most famous rogue traders is Nick Leeson, who was a derivatives trader at the Singapore office of Britain's Barings Bank. Leeson incurred heavy losses through the unauthorized trading of large amounts of Nikkei futures and options. Leeson took large derivative positions on the Nikkei which leveraged the amount of money at stake in the trades.At one point Leeson had 20,000 futures contracts worth over $3 billion on the Nikkei. A large chunk of the losses came from the downturn in the Nikkei after a major earthquake in Japan caused a broad-based sell-off in the Nikkei within a week. Total loss to the 233-year-old Barings Bank was well over $1 billion and led to its eventual bankruptcy. Leeson was charged with fraud and served several years in a Singapore prison. |
Related Definitions
Articles Of Interest
-
The Biggest Stock Scams Of All Time
Where there is money, there are swindlers. Protect yourself by learning how investors have been betrayed in the past. -
Bloodletting And Knights: Medieval Investment Terms
From bloodletting to ye olde black knights, things on Wall Street are getting downright medieval! -
Who set the record loss for "rogue traders"?
Every trader wants to set a record, but the hope is that it will be a record profit rather than a loss. With losses topping out at $7.1 billion, Jerome Kerviel better than tripled the trading ... -
How did Peter Young gain infamy as a "rogue trader"?
Peter Young's notoriety as one of the most memorable rogue traders is not a result of the amount of money he stole, but the bizarre events that followed his arrest and continued throughout his ... -
6 Asset Allocation Strategies That Work
Your portfolio's asset mix is a key factor in whether it's profitable. Find out how to get this delicate balance right. -
American Vs. European Options
These two options have many similar characteristics, but it's the differences that are important. -
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
How Risk Free Is The Risk-Free Rate Of Return?
This rate is rarely questioned - unless the economy falls into disarray. -
Top 4 Most Scandalous Insider Trading Debacles
Here we look at some of the landmark incidents of insider trading. -
An Introduction To Gamma-Delta Neutral Option Spreads
Find the middle ground between conservative and high-risk option strategies.
Free Annual Reports