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[dTraderB]

BTW, I closed FAS, ORCL, and CSCO longs. Still long C & JPM, and AAPL calls. Will close all longs tomorow and start opening shorts. What Do You Call A ‘Rogue’ Trader Who Makes $2 Billion? A Managing Director By David Weidner UBS AG apparently is the latest bank to suffer at the hands of a “rogue.” British police arrested a man on suspicion of fraud Thursday after UBS’ exchange-traded fund desk said a trader had racked up $2 billion in losses. Trading on Wall Street, of course, is a thinly controlled game of dice. Traders put their firm’s capital at risk, but must do so with authorization. As this latest scandal shows, authorization is either easy to come by or circumvent. And as nearly every “rogue” has said in their defense, there were winners making unauthorized trades, too. The difference: they were winners. Nick LeesonConsider the story of Nick Leeson, the first trader to bring down a bank. He racked up $1 billion in losses and was sentenced to six years in jail. Barings Bank collapsed under the weight of the exposure. In an interview with MarketWatch in 2004, Leeson said exceptional risk-taking was common. He actually used an account that his team had set up to cover losses of a junior trader. And as many accused rogues have argued, Leeson said the bank tacitly approved. The number of rogue traders — there have been at least 11 since 1995 who have lost roughly $10 billion combined – suggests that Leeson may be right. So, why is trading beyond internal limits allowed? Because of the winners. Enter Philipp Meyer, a former UBS derivatives trader who left the business a few years ago and wrote about the excess of the business for The Independent. To be clear, Meyer never said he made unauthorized trades, but he did offer this observation about trading. ” It was pretty clear what The Market didn’t like. It didn’t like being closely watched. It didn’t like rules that governed its behavior.” Then there is Jerome Kerviel, the ultimate rogue trader who lost $7 billion at Societe Generale in 2008. Kerviel claims he exceeded his credit limits regularly and that when he made money for the bank in 2007, he received a $$416,000 bonus for $60 million in profits for SocGen. Ultimately, the difference between trading floor rogues and royalty is how their bets pay off, not whether they take extreme risks. As Leeson said, there’s no excuse for not catching rogue trading today or even 18 years ago: “a very simple check would have exposed it.”