Won't Somebody Please Think of The Traders??
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- เผยแพร่เมื่อ 18 พ.ค. 2024
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The Société Générale Delta One Desk is back in the news after two traders were dismissed - accused of placing unauthorized risky options trades.
Kavish Kataria - one of the traders in question - attacked the banks leadership with a LinkedIn post on Thursday saying the “entire risk team and other bosses” were equally responsible for the trades and complaining that his bonus had been withheld.
The Delta One desk that Kataria worked on is the same trading desk where rogue SocGen trader Jérôme Kerviel caused a $5.2 billion dollar loss in a 2008 scandal that caused the US Federal Reserve to cut rates to stabilize markets.
SocGen told Bloomberg News earlier this week that two people based in Hong Kong had left last year - a trader and a team leader - after a “one-off trading incident, which didn’t generate any profit impact and led to appropriate mending measures”.
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I want to learn Klingon, I won't be staying on this planet for long, it's all gone Pete Tong ;p
Thanks Patrick, can't wait for your Mandarin lesson
Always sneaking in flexes about your shoe collection 😂
When is your vid about the beef between kendrick lamar and Drake coming out? I need your breakdown.
Feels like an appropriate sponsor, half of the technical terms in this video sound like a foreign language to me 😅, where would be a good place to start learning them?
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless.
The key to big returns is not big moving stocks. It's managing risk in relationship to reward. Having the correct size on and turning your edge as many times as necessary to reach your goal. That holds true from long term investing to day trading.
I totally agree; I am 66 years old, recently retired, with approximately $1.2 million in external retirement funds. I am debt free and have very little money in retirement funds compared to the total value of my portfolio over the past three years. To be honest, I didn't do all this alone, but with the help of a financial advisor. Having one is currently the best way to trade in the stock market, especially for people nearing retirement.
Is there any chance you could recommend who you work with? I've wanted to make this switch for a very long time now, but I've been very hesitant about. I'll appreciate any recommendation.
Finding financial advisors like Melissa Terri Swayne who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thanks a lot for this recommendation. I just looked her up, and I have sent her an email. I hope she gets back to me soon.
There is a decline in the quality of rogue traders.
🤣🤣🤣🤣🤣
Maybe Patrick needs to publish a new series "How to become a rogue trader 101" or something
rogue = crooked
@@djsmithe rouge = a type of makeup or reddening similar to it.
@@contentsdiffer5958 lol thanks, I'll fix it
Grammar matters: knowing you're shit is quite different from knowing your shit.
That's awesome!
I'll be keeping that quote for future use
'Knowing Your Shit' is a self help book penned by Mr Hankey the Christmas Poo.
Grammar does not include spelling.
I hope English isn't his first language.
If it's not, his mistakes are understandable.
If it is, who the hell hired him, and why?
“He was briefly the world’s poorest man….” This is why I come here. The knowledge is great but the delivery is what makes it enjoyable.
His reads beat anyone from RuPaul's drag race that's for sure. Patrick Boyle's a SAVAGE 😂
Missed opportunity for a Grammarly ad.
Unfortunately. Babble is still a good pick, but they missed the opportunity to place it at the and of the video.
It's about time socgen admits defeat and just rename the Delta One desk to Rogue One.
🤣🤣🤣🤣🤣
That's an underrated comment right there. 😂
😂😂😂
What about Crimson One?
With all their rogue traders, maybe they could partner with Warhammer 40K
the person is presumed innocent
until he or she become part of the Forbes top 100
Isn’t it the Hot 30 Under 30?
Just like SBF and Elizabeth Holmes….
Brilliant 😂
If your in the Forbes top 100, you're definitely guilty of something, you just may not have been caught yet.🤣🤣🤣🤣🤣🤣
Gotta love spoiled rich kids sleeping on their university classes then LARPing as traders right afterwards.
ao, traders?
Kerviel was certainly not that. He started on the back office (in security and fraud detection, amusingly), created some mean excel macro to automate a lot of stuff, impressed his bosses who put him in the front office.
I worked at the Socgen IT departement for two years, and have a friend who was there for 15. To be honest, the internal politics, and overall management make this news absolutely unsurprising to me. Oudea was a bad CEO., at least on the IT side: Socgen was probably the most high tech French bank in 2011, with a bit of NIH syndrom but a really good tech stack and few, efficient teams. Now its way past his prime, and one of the most costly IT departement for _european_ banks, for the 6th _french_ banck. His successor isn't better, worst on some point, but at least he doesn't believe in fairytales, like "moving to Asia will cut our IT cost by 40%!" (proceed to duplicate your teams, infra, and managers and more than double your cost in a year)
I didn't go to college, I'm not a larper
@@laughattack1204no one claimed that
@@MrMillefailvery insightful. Especially your last comment. Reminds me of other European banks hiring at job market floor rates in Mumbai and getting very poor quality IT people.
My friend at BNY became Vice President 1.5 years of experience. They're handing these titles out like candy to obsufcate the actual important people. Such a mafia move.
Isn't vice president a not that high title in corporate world for a long time? Wasn't MC in American Psycho also vice president despite not being anywhere near the top?
@@jimmcneal5292everyone in American Psycho was a VP. That was the joke
@@mattmurphy7030 I don't think it's a joke. Again, if I remember correctly, in finance VP is not a high title
Patrick Bateman approves 👍
VP means nothing. let us know when he becomes MD.
"I was not aware this is against the law, because I have done this several times and this is the first time you caught me, Officer."
"Don't blame me, blame them for not stopping me." 😂😂😂
I wouldn't even hire Kataria to run my lemonade stand. "According to me, buying 50M lemons was in my mandate..."
The French reputation of being arrogant is clearly undeserved. I was expecting him to challenge someone to a duel with rapiers.
@@Arigator2 No, sharpened baguettes.
@@ImNotaRussianBot Hon, hon, hon
@@HeviltheDevil TH-cam promptly offered to translate "Hon, hon, hon". It means "She, she, she", apparently. Can't wait for the algo to take over running everyhing, so we can sit at home, sucking on sweet UBI.
@@Arigator2 well, Kavish Kataria is not french so
“If you’re not going to rely on a lawyer, you can at least rely on spellcheck.” 😂
Black Monday on the same day as MLK day. You can't make this sh*t up.
Looool
Noticed the connection too...shrewd & diabolical insisting behavior.
oh shet
Blaq Kang 🖤🖤🖤
Celebrations take many forms I guess
The 'Defund Compliance' protest sign got me good 😂
All Compliance Officers Are Bastards
Came for the financial insight. Subscribed for the unmatched sass.
I'd pay for Patrick Boyle's masterclass in sass.
@@emeral311me too
@@emeral311 His sassterclass?
@@ProfAzimov I'm wheezing 🤣
The title is promising some sarcasm. Let me get a drink and popcorn 🤗
Please update. I haven’t started yet😂😂😂😂
and let me cleanse this fourteen billion USD debt sheet before start of video or I might feel personally attacked.
ovenright trade = hot trade; risk re-sporting = making a competition about who can take more risk.
Whereas Boris' Brexit deal was really oven wrong = crap deal
Makes sense when you put it that way.
risk re-sporting is running the competition about who can take more risk one more time
Well, that's mighty embarrassing, isn't it?
In Indian vernacular, "according to me" means something like "in my opinion" or "to the best of my knowledge", rather than something like "I authorised myself to do xyz".
Ah thank you, was wondering if that's what he meant.
Changes nothing.
Even then, it means he didn't verify it at the supervisory level.
"That's often how I feel, too."
rofl
That was a good one. I love Patrick's humor.
NO JUSTiCE -NO PEACE!
Defund Compliance!
Defund all of it! Give the money back to everyone and revert back to a barter based system like in Venezuela!
JUSTICE FOR TRADERS
SAY HIS NAME
Harambe @@mrguitarguygates
@Resolution001
Das Rite!
The joke about Kavish being a VP and having to step up if something happens to the President is the funniest thing I have heard all week.
As someone who works in compliance ......... you're never getting rid of us we are the Borg we will assimilate your trading desks, resistance is futile. Seriously conducting your legal defence on Linked-in just gives the prosecution more ammo
Thank you for your service 😊
Like it was ever difficult to fool the guys in compliance ...
@@SloverOfTeuth They are kind of dumb aren't they?
lock and load
Oh yes, I know, you don't understand a thing about the job and focus on cutting bonnus of people if they forgot to do one a the 20 mandatory training or if they forgot to declare a dinner with a broker, that right ?
I work in the trading industry (also with a lot of ex Investment Banking-people). My friends often don't believe me when I tell them about the poor risk management, the lack of knowledge on how the business/product works and general incompetency in this industry. So thank you very much for videos like these Mr Boyle. With each of those videos my friends get to see those stories from an industry expert!
I can totally believe that even in the highest of the highest positions, there are many people who have no idea what they are doing and only got to their position by licking the right boots
I once went on a date with a freelance lawyer who teased me, saying, ‘Do you not fully understand what your bank does? I know exactly how my company earns money.’
This is the challenge Investment Banking faces today: its overly complex processes and business models make it difficult for middle management to discern arrogance from confidence among new joiners.
The Tyler Lopez background photoshop was both artistic, yet intellectually compelling
Thanks for sharing your “KNAWRLEDGE”
As always Patrick
As someone wise once said : "The more you knawleg, the more you Lamborghini"
I'm here for the sarcasm.
That's the channel in a nutshell
YOUR NOT SUPPOSED TO ADDRESS IT IDIOT THATS PART OF THE WHOLE THING...
The Kerviel/SBF victim's playbook: "I'm innocent because I wasn't caught right away!"
also, because "I don't think I'm guilty."
To be fair, the risk management system exists for a reason. And when you think about it, at the end of the day, the one with larger long-term losses (in both customer trust and customer business) will be the bank, not the random-ass trader who went rogue.
One person is rarely solely responsible for things going wrong in this context. It's usually a sequence of failures. That isn't to say that the problem wasn't the rogue trader in question (because it was), but that simply, there is usually more to the story.
Humor with in depth news and education. The authorities are guilty of my crime because I wasn't caught before I committed the crime. Hey, your Mother doesn't work here, dude! Excellent. Thank you!
"Defund Compliance!" I love it. Why didn't think of it? Arrrghh BOOOYLE !!!! 😁
this man is truly an inspiration to us all. any illiterate schmuck can become a VP with hard work and gumption.
Quoting another commenter - "ovenright trade = hot trade; risk re-sporting = making a competition about who can take more risk." These were the two major 'grammatical errors' pointed out in the video. The other minor ones can also be chalked up to him clearly not being a native English speaker.
7:25
As a non-native English speaker myself I am shocked that no one did enforce an autocorrect on his post.
I assume it's his teacher's fault for not guiding his fingers while typing.
Can't wait to hear about the latest diss-track.
There he is!
I'm glad to know that if I ever was to apply for a VP position at SocGen, I wouldn't have to worry about grammar and spelling.
I have also noted that "according to me X was part of my role" is a valid defence statement to use if I'll ever get in trouble at work.
According to me I'm also allowed to take Lambos from the dealer and the fact that I haven't been caught yet clearly proofs that I'm right.
So bosses know when youre a minute late for work, or how many keystrokes you're doing each minute but cant be expected to know when you've taken a 50bn position on your trading desk. Sounds reasonable.
This whole "they knew what I was doing" reminds me of the scene towards the end of the movie "Margin Call", where it turns out that management knew exactly the risks involved in MBS trading and were just acting surprised in front of the lawyers
"...sentenced to five years in prison, but served only five months." Nothing dodgy there then.
A month for every billion lost, how nice 😂
@@tylerm2676 Indeed! "Nice work if you can get it".
Mr. Boyle's analysis of financial events: S-tier
Mr. Boyle's sense of humour: God-tier
🤔 I hesitate to ask why I should not be considered for a trading desk, when my mistakes would AT LEAST be within the risk metrics?
In retail it is common for managers to order employees to do something against company policy, terms of service, blatantly illegal etc etc and when the employee is caught deny telling them to do any of that. I'm sure this would happen in other businesses too, especially when they can use the employee as a fall guy should their schemes go wrong.
Kataria makes a fair point though, I mean, how comes the CEO or the Risk Management department didn't know where Billions of their trading funds were invested?? If a Trader isn't allowed to trade certain assets then the bank should have a system that blocks them from doing so.
The fact that we only hear about the Bad Trades and never the good ones shows that gambling is standard operating procedure in these Trading Desks.
I also suspect that these Traders got their jobs through nepotism or some other inappropriate means😅how can a VP fail in basic spelling and punctuation, he cant even use spell check😅
Exactly
Delta one desks trade options all the time because options can be arranged to replicate delta one derivatives (e.g. long European call / short European put both with same strike and same maturity is just a synthetic long forward). From there, you cannot just block option trading completely.
However, if the risk systems were good enough and stress tests on all parameters were run on a regular basis, they should have been able to identify if a given book clearly hasn’t a delta one payoff when aggregating all the financial instruments traded in the book. The huge concern about their risk management lies here IMO.
Also, delta one desks don’t use the bank own funds, they trade almost everything on borrowed money (they’re essentially leveraging the balance sheet of the bank), and the typical size of a given trade can be huge (up to a few billions for one trade). Size only is not a good enough indicator of whether rogue trading is happening or not.
And CEO's are paid bonuses IRRESPECTIVE of whether their company loses money or not
"According to me..." 😂😂
I'm usingthat line now, what a champ 🏆
Things unlikely to improve at SocGen until they change their logo, probably the worst corporate branding of all time: "The Negative Sign". Maybe the reason they keep attracting the wrong sort of employee.
Maybe (SocGen) in red font?
-(SocGen) in red font?
Patrick Boyle looks great. Great suit
Impeccable 👌
"Pull yourself together. You're a Vice President. If something happens to the President, you're going to be in charge." LOL
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Patrick Boyle On Finance aka Patrick Boyle OF 😏
Haha the Ben Bernank. Nice callback, one of my favourites.
Thank you for standing up for the poor traders. You have opened my mind to their plight. In sympathy with them, I think it's time for me to buy some fashion glasses and reevaluate my hairstyle.
I do find it strange that a person can be put in charge of hundreds of millions of dollars without having someone tell him what his job is. Perhaps they trust that the trader has received a proper education or has experience from previous work, seems wild to me.
Oh my gosh "defund compliance" had me laughing so much. Keep it up Patrick, I love the content.
"The unified theory of Delta One Roguishness" sounds like a great sci-fi novel. I would read the paper, though, just for the name alone.
That trip to Spain might be the most recalled trip of all time
LMAO the "This is a Disaster! you are on your own!" Clippy image had me cracking
Sometimes I listen to the podcast version on Spotify, but then I miss so many visual jokes. Thanks for the weekend vid! 😊
I'm still waiting for Rap news ...
Hired at Hong Kong, in 2021 is all you need to know how rigidly they applied their standards.
How on earth do you keep such a straight face when being so sarcastic. I'm laughing so much.
Hilarious 😂😂😂😂
I’d imagine with the amount of money this guy has seen he’s pretty desensitized to everything else
I don’t usually watch finance channels, but I can’t get enough of Patrick’s videos
Defund Compliance. Finally, a movement I can get behind!
according to me i am allowed by my mandate to transfer a 10% fee of my company's funds on any purchase that we do, so if they don't catch me right away i am innocent and refuse to testify in any court or spellcheck
"That's why people use lawyers, or at the very least, Spellcheck." 😂😂😂
According to me, this is the best channel on TH-cam
While I am watching this on TH-cam on my mobile, the next video is for some very dodging looking FX thing. I love how TH-cam lumps these together.
This also has me wondering. Often the case with videos treating these subjects.
I’m confused SocGen defined Delta One as product without optionality. It stills allows for options in order to achieve the synthetic Delta One. This is a quote from Sox Gen “Although these products do not have optionality, they can be built from options using the parity between calls and puts”. So why was he fired for using option and this video for mocking him?
Yeah I was wondering about that also. It's not clear from the reporting on the incident how exactly the trades were structured, so maybe they weren't net 1.0 delta in every evolution. Or maybe it was just the downside risk that was the firing offense, even if the trade structure was legit.
"Tengo muchos zapatos y los uso todos" LOL.... Outstanding!
didnt the rogue trader who brought down Barings Bank in the UK also claim that it was the fault of the executives rather than him?
Correct. He was an arrogant little twat.
I am not hugely interested in quantitative finance; I subscribe to this channel for the low-key sarcasm.👍
This is one reason credit suisse was in hot water.we got same problems here canada bay street or mainstreet do rougue traders,i was one victims myself here calgary alberta.lots high end accounts are on radars when rougue traders mess around.thanks again expose this.😮
“This is a disaster. You’re on your own.”
LOLLL
What I would really love to know is who was the world's poorest man who paid back their debts instead of declaring bankruptcy or defaulting on the debt.
Holy shit I'm actually on time for one of these
Yet another masterclass in subtle sarcasm. Congrats!
0:18 HOLY DEEP CUTS ALMIGHTY!
According to me, I was allowed to
Defund compliance!
A rallying call we can all get behind. Great one Patrick.
I’ve created and worked on trade booking/position keeping/risk management systems at tier one banks. It is extremely odd that they even had permission to book these trades. And normally on these desks you only have access to linear products.
😅 I'd think that if a trader isn't allowed to trade certain assets then those assets shouldn't appear on their monitor. Unless the bosses were in on it too.
I definitely can book unauthorized product. The control is not done in the booking system.
I do exotics option thus, and the risk mandates are much more complicated than delta one though.
I used to trade an unauthorized trade because risk team removed it from the mandate by mistake. The way this incident was handled was absolutely shocking. Even if the product was removed by mistake I was hit with a "serious breach" my management line didn't defend me arguing I have to check the 10 pages mandate every time (while I have to respond withing seconds to request). And they proove to be incompetent in understanding the basic constraints we have has trader.
@@adrienadrien5940 yes it’s totally understandable on an exotics desk
You are one of my favorite channels on TH-cam of any type and topic. Thank you !
Wow, my first premier! Like your finance content but especially love your sarcasm.
Your dry wit, stylish commentary and insight are why I follow your work. You're doing Wotan's work, Sir. Carry on.
He looks like a little real GigaChad lol. “Oven right positions” 😂. Must have been trading futures on Mrs. Fields and Little Debbie cookies and snack cakes.
THE TAI LOPEZ EDIT
That does it ‼️‼️Patrick has found his new Credit Suisse replacement punching bag ‼️🤣
6:30 _"...But do you know what I like more than global financial markets-crashing trades? _*_Knowledge._*_ "_
Delta farce.
(You can't derive a mandate from yourself. You can't give yourself permission to break someone else's rules. You *can* ignore them, or refuse to acknowledge their authority, or point out that some of the rules directly contradict some of the other rules, so no-one can follow all the rules all the time, or calmly point out that the rules as written do not reflect any version of operative reality due to flawed assumptions or poor semantics, and thusly should not be followed because to do that would create total chaos, or in fact any number of logical responses to the imposition of someone else's mental map and the associated cascading logic that derives from it.
But 'Nuh-uh, Imma do what I want! Everyone else needs to immediately restrain me if they don't like it!' is toddler logic, even when it's expressed with adolescent level grammar and spelling.)
No mention of the Drake/Lamar situation ? Patrick, I though you were the best source for rap news.
With " according to me" he means his understanding of his job description was that he was allowed to trade options, or at least that's his claim rightly or wrongly. In the abscence of any documentation i.e. job descriotion , trading rules for that desk etc. it's hard to judge what was really going on at Soc Gen.
The only rule is Make Money
0:17 talking bear videos will always be funny to me, so many good medical and economics related ones
Oh my. Defund Compliance!
Always 😅 Amazing stories from our Professor Boyle. 🎉
This is so entertaining. The fact that you can report on this with a poker face just blows any of the Netflix series (I canceled my Netflix subscription because they are not even trying anymore).
Oh no, we definitely do think of the traders, we're often making rules and decisions specifically with them in mind.
Using the 'rouge trader' excuse, any giant corporation can explain how some random box handler destroyed a shipping company or how a clerk set in motion the end of Western Civilization . . . .
Lol this was fun. I find it funny how you can be making upwards of 200 thousand dollars a year on the front desk and get in over your head so much that you feel like you own the bank now and start disregarding every regulation.
always in my prayers
Hahaha I loved that Vice President remark! HAHA "you're in charge if something happens to the president:" that's the funniest thing I've ever heard.
The trading system was far more likely the culprit than the risk system. What products are tradeable by a desk or individual are down to the trading system, simply the trader shouldn't have been able to enter an option if that's not part of their desk's remit. The risk system would have been involved only after the trade deals were entered prior to execution. The risk system would then have an incredibly small window to return a yes/no decision. In this case an option expiring on the same day would have generated very little risk. The fact that only worst case stress testing showed an issue would not be part of the risk system decision making in high volume trading scenarios. The limits for the desk\trade type\ccy and underlying asset are set in part to act as a proxy for stress scenarios. As for stress testing a 25% fall in say an Indian stock index will impact all the banks trading on that index or underlying stocks. Additionally the risk department will likely have movements in the index correlated with movements in other assets say INR in this case. Stress testing will want to see the whole picture, a loss in one set of trades may well be offset (or exacerbated) in another area of the bank's trade portfolio.
'The worlds poorest man' 🤣. Starving people in Africa sending him their food aid. 🤣