We often watch movies surrounding Trading and are left with an imprint of the debauchery, lavishness and outrageousness of elite traders.
I think if we are all honest there is an element of envy experienced by all of us when we see images of Leonardo DiCaprio throwing dollar bills into the air, aboard private yachts.
This article will explore some of these movies and how we can take some of the action away and contemplate compared our own trading experiences.
The Big Short
A film based on bestselling nonfiction book, The Big Short by Michael Lewis was released in 2015. Based on the economic housing collapse of 2008 and the dealings which led to the collapse,
The Big Short gives an insight into how certain investors made millions from an almost cataclysmic, economic disaster. 8 million Americans lost their jobs due to what happened in that Fiscal year of 2008.
In the late 1970’s, Bond trader at the time, Lewis S. Ranieri is a former bond trader and founding partner and current chairman of Ranieri Partners, a real estate firm, came up with the idea of Mortgage backed security.
The movie focuses on how this model almost brought America to her knees financially.
Mortgage Backed Security Explained
Banks issue a mortgage but there is a perceived risk with the presumption of the mortgage holder defaulting on payments.
The banks would not want to take the risks of these mortgages so gathers a group of mortgages and sells them as a ‘’tranche’’.
A tranche is defined as a security that can be split into smaller fragments and sold on to investors. Anyone can buy these bonds created by the tranche and were doubled down by the banks, creating an extremely volatile and fragile environment. A ticking time bomb.
In the movie as well as in 2008, a chain reaction occurred due to the lending, borrowing and bonds being issued that something had to give.
The movie itself is not completely nonfiction for entertainment purposes and character flow but comes pretty close to the real accuracies of what went on when .
All but one character had their name changed for screen purposes apart from Christian Bale’s character, Michael Burry.
Burry was known for his relaxed attitude in the workplace – often walking around barefoot, downdressing and his passion for the ‘Rock’ lifestyle shines through.
An interesting fact is that when Bale met with Burry, Bale in fact requested some of Berry’s on clothes to wear during filming, adding an air of authenticity to the character.
Burry had the foresight to understand that this ‘house built on sand’ structure was not going to last and decided to betagainst the subprime-mortgage bonds that were being issued.
Other lead actors in the film include Ryan Gosling who also narrates the movie, Brad Pitt and Steve Carrell.
What this movie shows us and what we can learn from is that the people responsible for the livelihoods and homes at that time in 2008 did not have the interests of the masses at heart. Wall Street failed the people.
These sort of economic events further back up the thoughts, feelings and convictions of many people in that digital assets such as Bitcoin are the future.
Decentralized currencies means that there is no ‘’Wall Street’’ to play Devil’s Advocate with Billions of Dollars worth of client funds. The events of 2008 left many members of the public having severe trust issues with financial institutions.
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Staying with the theme of 2008, Margin Call follows the movements and decisions of management staff at an Investment Bank – set over a 24 hour period.
The tense drama starring Kevin Spacey and Stanley Tucci is set in the early stages of the great financial crash of 2008.
An analyst at the head of the company is dismissed and when his successor begins to dig a little deeper, the true reason behind the financial downfall quickly becomes apparent.
Kevin Spacey gives a masterful performance in this gripping drama documenting the great financial crash of 2008. Interestingly, the entire picture was shot at One Penn Plaza at an old hedge fund’s office.
The trading floor of Citi was also used as an on set location adding to the authenticity of the movie.
The Wolf of Wall Street
For a lude take on stockbroking and an insight into the wild life of a trading floor, The Wolf of Wall Street provides a fascinating insight into the rise and demise of Jordan Belfort.
Belfort made millions in the 1990’s through investment firm, Stratton Oakmont and is played on screen sensationally and outrageously by Leonardo DiCaprio.
Released in 2013, this is a true Scorcese masterpiece. Belfort is left looking for employment after a collapse on Wall Street and finds work trading penny stocks at a small local firm which is far from the glossy environment that a high end stockbroker is used to.
He meets Donnie Azoff, an eccentric character brought to life by Jonah Hill, in a cafe. Donnie within minutes of meeting Belfort, quits his job there and then in order to embark on a new journey into stocks with Belfort.
What follows is a meteoric rise to the top, millions of dollars spent on fast cars, yachts, jewellery, mansions and $26,000 dinners.
After the initial success comes the expected knock on the door from the FBI. All the money and outrage generated through their wrong-doings didn’t go unnoticed and enter Kyle Chandler trying to bring Belfort down.
There are many aspects of the movie that we can take away and learn from.
There are strong characters throughout the movie including epic performances from Jonah Hill, Matthew McConaughey, Jon Berntha and Kenneth Choi to name a few.
What have we learned from Wolf of Wall of Wall Street?
Belfort’s team certainly had one characteristic in outrageous abundance. Confidence! The movie does display to the average trader that it confidence a core ingredient to success.
Staying with success, Belfort’s team certainly knew how to celebrate it. These moments of fanfair, such as a full brass band coming through the office with cheerleaders included, are some of the movies wildest and most comedic parts.
All staff underneath Belfort had a true cut throat tenacity about them, almost primal at times. This is a characteristic we can all aspire to. Don’t give up!
This is not only one of the greatest Trading movies ever made, but one of the most popular movies ever! The masterpiece certainly conveys that a traders life can be truly exhilarating.
Oh, and it also taught us not to drive home from a country club in a Ferrari Testarossa after taking quaaludes…
But to finish on serious note, traders should be relaxed before and after a trading day as well as it being crucially important to develop a trading strategy. Just try and not overdo the ‘relaxing’ part.
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Although not a movie, this true to life documentary gives a fascinating insight into the trading floors in the city of Chicago.
The movie encapsulates the most primal forms of buying and selling and trading floors of Chicago have provided a platform for this for over 150 years.
The film highlights that this primal way of trading was heavily practiced up until 1997 when computer trading came to the forefront.
Prior to this, more than 10,000 people traded on the floors which look more akin to bear pits. Nowadays, roughly 10% of that original figure remain.
With interviews with people there at the time, Floored provides an amazing insight into what this riotous form of trading was actually like.
Nowadays we can trade our favourite Indices, Stocks, Forex and even Cryptocurrencies all from the comfort of our own homes.
The movie has some brilliant archive footage to give you a taste of how the environment was.
We can learn a lot from TV and Film in regards to any subject. Movies specifically surrounding trading give us a peak behind the curtain of what trading floors are like and what it might be like to work at a huge financial institution.
The next time you are involved in a Forex trade, try and imagine a whole bunch of further zero’s on the amount and we may start to gain a feeling of what it is like for the elitist.
To learn and have a little fun along the way, all the above movies are well worth a peek.
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Disclaimer: The content of this article was provided by the company, and does not represent the opinions of Finance Magnates.