When I was at Nomura, one of my superiors used to come and put the odd position on. “Where do you want to leave your stop?” I’d immediately ask. “Surely you mean my profit?” he’d reply. Let’s just say the former was always triggered before the latter.
The practice of senior management having a punt raises issues: specifically, what should the banks full-time risk takers do when their boss has stepped up to the plate? Should they go with the big cheese, stay square, or trade against them?
There is plenty of buzz around about a top 10 Euromoney bank that has done its cods as a result of this type of dilemma.
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