$300 Million Profit in One Forex Trade — The Story of Krieger and the Kiwi

The morning of October 19th 1987 might have seemed just like any other Monday in the markets. It was a chilly day in New York, but little did the traders in the Stock Exchange know that things were about to heat up dramatically.

Unexpectedly, the global financial markets crashed throughout the day and the Dow Jones suffered a 22.6% loss, the worst single-day drop it has ever seen, on a day that would forever go down in the history books as ‘Black Monday’.

Without a single significant identifiable cause for the crash, it’s thought that the huge moves were as a result of panic in the markets. However, not everyone was panicking in the sea of red.

One trader in particular who achieved legendary status thanks to these dramatic events was Paul Tudor Jones. Along with his right-hand-man Peter Borish, he famously predicted a crash was imminent and netted a hefty profit of $100 million. This extremely successful trade threw Tudor-Jones into the limelight and made him part of trading folklore.

There are also many lesser-known traders who achieved impressive levels of success while the rest of the market was in free-fall. One of these traders was Andrew Krieger, a trader from Bankers Trust, a New York-based bank that later became part of Deutsche Bank.

Krieger’s success around the time of Black Monday led to Bankers Trust making a tidy profit of $300 million on Krieger’s trades. It was thanks to this sort of bold and fearless activity in the markets that earned him the title of “most aggressive trader in history”. On this occasion, it was thanks to his involvement in the New Zealand dollar.

The New Zealand dollar, also known as the kiwi, was still relatively new and untested. It had…