Andy Krieger / 1987 / Macro
A small currency, a large expression.
Andy Krieger and the workbook’s post-crash currency short.
Before the outcome was obvious.
The workbook presents Krieger’s New Zealand dollar trade through options and a post-crash valuation thesis. Options can turn a relatively modest premium into a much larger economic exposure, but that makes the meaning of “position size” especially important. A single dollar figure can refer to premium, notional or an exposure adjusted for market sensitivity. The source does not resolve those distinctions for this record.
What could have gone wrong
Option value depends on time, volatility and the path of the exchange rate. Notional alone does not explain either capital at risk or potential profit.
Know what the position-size number measures before calculating a return from it.
Put the thesis to the test.
Change the assumptions and watch the arithmetic update. These are simplified scenarios; they do not recreate the instrument’s pricing or the path of the trade.
How this model works
Profit ratio = profit ÷ stated position. Exposure ratio = stated position ÷ fund assets. Neither is a measure of maximum loss or a net investor return.
The workbook’s simple annualisation is profit ratio × 365 ÷ duration = 782.1%. It is linear, not compounded, and is not a repeatable annual return. Fees, financing, collateral, premium carry and changing exposures are not modelled.
What these figures mean.
Source: Legendary Trades Models, Master Comparison!A22:L22; Trade P&L Models, case 19. The following are original workbook inputs, preserved for transparency. They are estimates, not independently audited results.
- Workbook position
- $1bn
- Workbook “gross profit”
- $300m
- Workbook duration
- 14 days
- Workbook fund assets
- $500m
- Workbook fund return
- 60%
- Workbook position ROI
- 30%
The fund-return field is a separate source claim, not a calculated result of this trade. Its reporting period and gross/net basis are not independently established here. Model ratios are recalculated from inputs rather than copied from rounded source ROI values.