Don, the problem was Brandon was on tilt, and nobody at the firm recognized it, Brandon being a poker player, should have recognized that he took some losses, and he needed to tighten up his initial starting hands, not loosen them, he was playing 56 suited, and going all in!
(Not that Brandon needs any defending from me).... Brandon actually called my brother, pre market, to discuss the positions. He handled things in a professional manner. Don't get me wrong, I do think he got a bit carried away with his positions....on both sides...some would slow down while ahead a few $million...... oh well, I'm sure he'll be fine. Don
so how much did brandon actually lose? it sounds like $3 mil plus. is he still trading? how much risk capital did he have up?
From what Don has said on this thread the guy was up big [realized] and took a hit on marks and got stopped on the Tysabri data. FWIW, the drug is efficacious beyond their initial endpoint, save for the pesky brain-pan explosions. IOW, it took everyone by surprise, which is the nature of these plays. He probably thought he had an out the following week during the conference, but the neuro-issues came to light. If it were me, I would force anyone trading into medical-data to statarb the position against any partner if there is one. BIIB in the case of ELN. If not, force the issue of natural or synthetic calls in this case or reduce bet-size to some fraction of the trader's cash.
Don I really respect your contributions but this is just plan bad risk controls. You always need to plan for the worst. Every trade, plan for the worst, there is no way he should have been allowed to get into such a situation especially in this market.
I'll admit for a poker player with little trading experience he was probably using too much size but i've heard of guys that blew out their accounts doing stupider shit...it is funny how the very prospect of someone losing money brings out the hyenas.
I am actually lossing $1000 on mer and smoke is coming out of my ass I cant imagine people who lose $20K to a million what might happend to them I know that i am a small fish but these people must be having some sold backing i guess
Has nothing to do with hyenas. It should never happen, if you are up millions and especially if you are working for someone else, a trader should never have control of that much stock that could wipe him out. That is what controls are for.
you guys have got to understand the poker player mentality. We get such good returns on our poker money because of the nature of the game, that 50% bankroll drawdowns aren't really a big deal. Doubling a bankroll several times is pretty easy, and the risk of ruin is really quite low if you step down when necessary. I am taking a similar approach to my trading management, although toned down a bit. I suspect this is what brandon A was doing, and he just so happened to get burned on every position in a way that won't happen very often. From the tone of his post on the poker forum he doesn't sound too crushed so I think he was aware of this possibilty and willing to gamble it up a little bit.
If you make a couple of hundred and lose that huge amount then you become crazy. But if you make the same level of that amount then there's nothing to become uncontrollable. Your brain will somehow adjust to the situation.