Andy Krieger: the story of a record deal
Trader Andy Krieger became famous in a moment – he became famous for a record deal that brought $300 million in one day. The financier decided to bet against the currency of New Zealand and was right, as a result of which the country’s economy suffered serious losses.
There is nothing extraordinary in the biography of Andy Krieger. He was born in 1956, and after graduating from school he went to work at Solomon Brothers. The latter company was not selected by chance – at that time the firm took people with no experience and knowledge in the financial area and helped them to master stock exchange trading. In 1986, having already gained some experience, Krieger moved to Bankers Trust. Here, apart from working with bonds, the trader became acquainted with other assets, expanding his competence. So, one of Andy’s main activities was options on currency pairs, and it was these that made the broker famous.
In 1987, the stock market was hit by the crisis – the Dow Jones index collapsed, which led to active operations on various exchanges around the world. Investors urgently diversified their portfolios, withdrawing money from one asset to another. Such dynamics resulted in falling exchange rates even for the currencies which were considered stable. And Krieger decided to take advantage of this situation. He decided to work with the pair of American/New Zealand dollars, taking a small volume of trades. The case is that the rate of this country could be influenced one way or another, unlike most popular currencies. Besides, Andy was sure that New Zealand’s money was overvalued and could sink at any moment. The trader opened a deal to buy the country’s currency, putting up an amount of $15 billion. His actions provoked a downtrend, which led to the collapse of the New Zealand dollar by 5%.
The surprising thing about Krieger’s actions was that his capital was only 35 million dollars, and the amount of the deal was billed at 15 billion dollars. The trader was saved by the leverage of 1:500. Under such conditions, the deal seemed to be extremely risky, but Andy managed to earn 300 million dollars.
Despite the success, Krieger soon left Bankers Trust, arguing that the company had given a small bonus for the deal, only $3 million. At the same time, his employer hinted that Andy might have been involved in the disappearance of $80 million from the company’s accounts.
After that, he tried his hand at various investment funds until he founded his own analytical agency. In addition, Krieger continues to gamble on the stock market but does so anonymously.