BNP Loses $80 Million on S&P 500-Linked Derivative Trades

ironchef · Jan 17, 2019

But someone must be making money off those losses?

ajacobson · Jan 17, 2019

The holders of the ELN that were mis-hedged. They still get paid out.

bone · Jan 17, 2019

I've seen this a few times over the Christmas holidays. A couple decades ago a Korean blew out Griffin Trading with a monster loss between Christmas and New Years in the German Bund. Was using give up agreements with other FCM's to cannonball his position.

bone · Jan 17, 2019

jharmon said:
Does anybody understand the meaning of bonus these days?
More...

There is an individual performance component and a group (desk) performance component to bank trading desk bonus pool payouts. So yes, the loss will affect the bonus payouts for everyone on the US Index Trading Desk - traders and analysts.

jharmon · Jan 18, 2019

And so it should affect the bonus payouts!

murray t turtle · Jan 18, 2019

ajacobson said:
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.
More...

%%
This should be double checked, not do i believe everything i read in WSJ[paper], or online.
I'm not long or short those banks [JPM, MS, C]

Fixed income[which WSJ defines as bonds, commodities was down. BUT equity trading profits was up........quarter, 52 weeks I'll try to find that article, google may help. Thanks

wrbtrader · Jan 18, 2019

ajacobson said:
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.
More...

I wonder why they couldn't reach him while he was on vacation or why didn't their compliance office close those positions before they became an eyesore.

Then again, maybe the 80 million in losses caught their attention instead of when it was at 40 million in losses.

Geeesh...80 million in losses and he has not returned to work. Has he been killed ???

wrbtrader

bone · Jan 18, 2019

wrbtrader said:
I wonder why they couldn't reach him while he was on vacation or why didn't their compliance office close those positions before they became an eyesore.

Then again, maybe the 80 million in losses caught their attention instead of when it was at 40 million in losses.

Geeesh...80 million in losses and he has not returned to work. Has he been killed ???

wrbtrader
More...

This is what was known on the floor as the "Bahamas Spread". Idea being that if you were in perilous straits with your position; you added to it (cannonball) before the market close and took the next flight out to the Bahamas. You came back if it turned out well - you didn't bother returning if it didn't. That's the backstory, anyway.