Trading history’s top financial trades
7. Jesse Livermore
As a successful ‘short-seller’, he may well be among the earliest examples. Just prior to the San Francisco earthquake at the turn of the 20th century, he shorted stocks. A total of $3 million was earned through this trade.
The trader then proceeded to short the market crash in 1907 after developing a taste for this type of trade. As a result, he became richer by $100 million.
His most famous year was 1929. As he was shorting the entire market, the stock market crashed. That is a great example of short trading that is both intelligent and informed. He became a $100 millionaire on the day of the 1929 stock market crash.
6. Paul Tudor Jones
It is logical that this individual would be the next step in short-term trading success. Tudor Investment Corporation was founded by Jones in 1980. His prediction of Black Monday in 1987 followed Livermore’s success. As a result of his efforts, he received a considerable financial reward, about $100 million in total.
5. Andrew Hall
It would be more accurate to describe Andrew Hall as a long-term investor. In the past, oil prices have fluctuated over a long period of time, and Hall recognized this. As a result, he developed a plan to take advantage of this understanding.
At one time, Citigroup operated an energy trading division called Phibro.
This group of people hired Hall, and he was particularly concerned about the price of oil. 2003 was a year in which oil prices were low, at approximately $30 per barrel. In five years, Hall bet on oil’s value increasing by $100, so he traded very long on oil. Ultimately, he was correct in his prediction of the level of growth.
As a result, there were difficulties. Citigroup didn’t pay Hall the full $100 million they owed Hall despite he making Citigroup millions. Phibro was then removed from the company.
The oil trading community refers to him as a ‘god’. It is worth noting, however, that the market is so volatile that Hall recently stated that automated trading systems (rather than his instincts and a studious approach) are responsible for destroying the oil trading industry. He is an expert in the field.
4. John Arnold
Shorting stocks based on market conditions is a perfect example of a trader who carefully considered the market conditions before shorting them. In his capacity as a manager of an energy hedge fund, Arnold was involved in some very good decisions concerning this market.
Natural gas prices had been predicted to rise by a rival hedge fund in 2006, Amaranth llc. According to Arnold, the winter will be mild, and he shorted natural gas. In the end, he made a large amount of money — approximately $125 million — and Amaranth failed.
3. George Soros
Despite the fact that the pound was backed up by the European Exchange Rate Mechanism, it was protected globally. Soros was aware that this protection could not be maintained and that the artificial status of the pound was at risk. In order for markets to thrive, interest rates must be volatile, and this was not occurring.
Soros shorted it.
In this case, he was taking a short position at a time when the pound was performing well on a fixed exchange rate. As a result, he was forced to pay a substantial amount of money. The trades were made possible by borrowing money. A large and damaging event occurring at the Bank of England was the sole basis for the position. It was an innovative strategy. Soros made millions of dollars as a result of the British government withdrawing from the Mechanism. After the dust settled, Soros is believed to have earned a total of $1 billion.
2. David Tepper
This is an example of an individual who took a rational approach to the banking sector and made a decision. At the beginning of 2009, most economies had been affected by the financial crisis, and the United States in particular was beginning to feel the effects. Banks did not have a good time during this period.
A country’s government tends to nationalize banks and other financial institutions when economic conditions are extremely difficult, and the United States was poised to do so. Consequently, Tepper acted contrary to what everyone expected and purchased a large amount of bank stocks. As a result of the return to top form of the major US banks during that year, their stocks rocketed. It is estimated that Tepper made around $4 billion as a result of this.
1. John Paulson
In his experience, Paulson possessed a keen understanding of the housing market and he was able to short it at the right time. Specifically, he did not short the entire market, but only the subprime portion.
A number of banks, including The Bank of America, were convinced by him to write credit-default swaps against the subprime mortgage market. As a result of the collapse of that market, he was able to make a substantial profit through his subsequent stock trades. In the wake of the market crash, the hedge fund he was a part of earned approximately $4 billion.
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