Pelham 1 2 3 Unrealistic Returns?
I just saw the movie The Taking of Pelham 123, and basically John Travolta is an ex-Wallstreet guy who pretends to be a terrorist and hijacks a NYC subway, taking 20 people hostage. During the couple hours he has the train hijacked the stock market goes down, and gold prices double due to the uncertainty. He is able to take advantage of knowing that the market would react this way, and using options, his $2 million initial investment grows to $300 million in that one day. I know this is a movie, but could anything close to this ever happen in real life? I'm curious because when I saw his investment grow 150x I could not help but be very skeptical.
you getting some ideas?
Gold wouldn't double in a day even if all those hostages were major world leaders.
On second thought, if Obama and Geithner were on the train, I'd push FAS all in.
Noo dvd, I'm not gonna do anything like that. I'm just curious, if all of us knew that gold would say about double tomorrow, what could we do to profit the most out of that knowledge?
How much econ have you taken? The market is forward-looking, which means that if "all of us knew that gold would say about double tomorrow," then there is nothing you could do to profit. The price would have already doubled before you had any time to act.
Depends on who you are. As a retail investor, maybe 20x straight on gold futures... either that or way out of the money calls on a triple leveraged gold ETF (depending on how it rolls and what part of the curve it trades) or calls on FCX or other gold producers.
The idea is not altogether ridiculous, some fast reacting gold traders in NY who knew about the WTC attacks went long in huge positions expecting a flight to tangible assets. Even then, though, I think gold was only up ~6% by days end. On the other hand, with a lot of leverage you could make quite a nice profit.
I can just imagine the convo b/w 2 WTC traders
T1: A plane just hit our building. WE NEED TO GET THE FUCK OUTTA HERE T2: Really? Hold on. (Picks up phone) I NEED... 1m of DGP (Building collapses)
cough Eurodollar futures cough
Solidarity, maybe I was not clear. I was asking people on this forum for their thoughts so I meant if all of us on this forum knew, not the entire market.
Anyways, to me it was an interesting thought.
$50mm in futures please.
OTC calls (maturing ASAP and way out of the money-- super cheap) on futures. Yay leverage.
There was also a famous incident in the 80's I think where someone in London spread the rumor that Reagan had died, causing gold to go crazy. Rumour lasted for several hours.
http://www.nytimes.com/1983/04/15/business/commodities-silver-in-sharp-…
Offtopic: once, members of Greenpeace tried to interrupt one of London trading floors ( I believe commodities, they were aiming at oil). 25 of them somehow got inside and started making noises. Well, traders beat the shit out of them and kicked them out, then continued trading (security didn't do anything).
Not entirely likely but you could def. make some money if you where the one controlling the event. Your best bet would be to short a company like Apple and then assassinate Steve Jobs...or something similar. Although it might be easy to track you down when you are the only one that happened to short 1M worth of Apple that day...but of course you could already be out of country.
They do stuff like that on that show Leverage.
Good luck.
Was he levered? Leverage and deep otm options combine to form an incredible return given big price movements.
I don't recall exactly, as I thought it was a terrible movie, but I think I remember it showed gold being up some crazy ridiculous price, like 15000% that day to like 140,000 or something. That would explain the $300+mm return.
oh are you serious? that's just stupid then... I thought he did some complex options transaction or something.
Yea the 800% increase in gold price is ridiculous. The Wall Street would not give a crap about 19 hostages in NY subway.
"Offtopic: once, members of Greenpeace tried to interrupt one of London trading floors ( I believe commodities, they were aiming at oil). 25 of them somehow got inside and started making noises. Well, traders beat the shit out of them and kicked them out, then continued trading (security didn't do anything)."
haha story sounded really funny so i googled it, it's true http://www.timesonline.co.uk/tol/news/uk/article515384.ece
though the hippies being hippies didnt fight back at all so it's not like it was some huge brawl
that article was hilarious. "The violence was instant"
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