We’re seeing some very special price moves at present, ones that we’ll look back on in a few years time and say, wow!. What have been past incidents that you have witnessed that you now look back on? Here are a few of mine:
1987: I was lucky enough to be on the trading floor at the SFE on the day of the big crash. We waited patiently for the SPI to open. As soon as it did security guards were ushered in and physically removed some of the traders. These guys had been selling volatility, namely put options, and had been bankrupted overnight. They’d lost so much that they only had one choice – trade out of it. Losing more didn’t matter. They were removed to protect the clearing houses from default.
1987: Again that frightful day. The SPI usually trades 1-point per move. On that day the unofficial bid/offer spread was 50-points! Whilst that in itself is amazing, the two other facts were that the index was trading at 2000 back then, so that was a 2.5% price gap on each and every trade made. Secondly back then the SPI was $100 per point, not the $25 of today. Therefore the bid/offer spread was $5,000!
1995: When I worked for HSBC in London, the dealing room had 1000 people trading away across every product under the sun. The foreign exchange department was just outside my door with about 250 people. This was the days at the height of Soros and on this day he hit the market selling $2 billion worth of currency. It was the job of HSBC to make Soros a price then distribute it onto other institutions in the quickest and quietest way possible. A large count down board lit up above the desk with $2,000,000,000 on it. Then a single trader stood and accepted all the orders from nearly 200 sales staff. They yelled out their orders and he took them whilst the big board counted it down. It took about 4-mins to clear the $2-billion.