Markets BNP Loses $80 Million on S&P 500-Linked Derivative Trades By Donal Griffin , Harry Wilson , and Alastair Marsh January 15, 2019, 11:01 AM CST Updated on January 15, 2019, 11:44 AM CST U.S. index trading head Antoine Lours hasn’t returned to work Loss said to be incurred around Christmas on S&P 500 position A logo for BNP Paribas SA hangs outside a branch of the bank located on the Avenue de L'Opera, in Paris, France BNP Paribas SA, the biggest French bank, lost $80 million in derivative trades linked to the U.S. stock benchmark late last year as turmoil gripped global markets, according to people familiar with the matter. Antoine Lours, the New York-based head of U.S. index trading, has yet to return to the bank since going on his Christmas vacation after positions he took on the S&P 500 Index went awry, the people said, asking not to be identified because the details are private. The majority of the losses came over several days in the run-up to the holiday, the people said. Lours was on vacation when the trade began losing large amounts of money as the S&P 500 tumbled, the people said. U.S. stocks posted several sharp drops in December due to fears over escalating trade tensions between the U.S. and China before quickly gaining again, whipsawing investors and traders. Lours didn’t respond to a request for comment made through his LinkedIn account, and a colleague at his desk in New York said the trader wasn’t in the office this week. Ilias Catsaros, a spokesman for BNP Paribas in New York, declined to comment. The losses add to problems at BNP Paribas’ trading unit, where Chief Executive Officer Jean-Laurent Bonnafe has been trying to bolster revenue and vault the overall investment-bank division into Europe’s top tier. Fourth-quarter trends aren’t encouraging either: Citigroup Inc. and JPMorgan Chase & Co. both posted plunging bond-trading revenue for the period this week while smaller French rival Natixis SA reported a hit of 260 million euros ($296 million) on Asian equity derivative trades in December. Read More: BNP’s Skittish Traders Add to Challenges for Worst Bond Unit The Christmas trading debacle comes as the French bank winds down some of its other markets businesses. Last week, Bloomberg reported that BNP Paribas was in the process of closing its proprietary trading arm, Opera Trading Capital. This week, it emerged that the lender is winding down its U.S. commodities derivatives desk.
That's strange .... Those experts should be earning millions of dollars, not the other way round. How did people ended up keying the buy sell buttons in the wrong sequence? And A nightmare at Christmas ought to be A blissful and joyful Christmas
There we go! Maybe this one gonna be the first in the chain of autocall blowups, with Asian vol all over the place and other festivities.
If you get to use the bank capital, you can go for really big wins, ie bet countertrend. If you are right you make a killing on a single trade. If you are wrong, you just lose your job and go to another place. It's a really favorable trade for bank traders, like a free option.
Did they deserve the bonuses? Is the meaning of "bonus" for actual performance (i.e. alpha) so far removed from reality?