Trading movies and documentaries are a great way to get excited about trading and the possibilities of making money. There are also some great lessons on what NOT to do when getting involved in the markets as most deal with extremely aggressive plays or illegal activities. Here are 5 great trading movies & documentaries every trader should watch:
1. Margin Call (2011)
Great movie about the early stages of the financial crisis of 2008. The movie is a story about an investment bank that has an over-leveraged portfolio of mortgage-backed securities. Once the firm discovers that the firm is on the brink of destruction, the bank tries to make a plan to save their clients’ portfolio from destruction, and how they will avoid a margin call on their positions. Many good lessons in this movie about risk management, the importance of using margin correctly, and keeping losses small.
2. Boiler Room (2000)
If you are unfamiliar with “pump and dumps” and “boiler rooms”, this is a great movie to get educated about them. A boiler room is essentially a stock brokerage that uses its brokers to create demand from unsuspecting and uneducated individuals who buy stock in worthless companies. The brokers make a ton of money from commission selling these terrible companies, and from dumping their shares after investors buy up the stock price a ton. The Movie takes place in 1999 when boiler rooms were prominent. The story is told from the perspective of a 19-year-old drop out who joined the boiler room on promises of riches and quick money and ends up discovering the reality behind the wealth everyone flaunts.
3. To Catch A Trader
Amazing documentary about the legendary Steve Cohen, one of the most successful hedge fund managers of all time. Documentary goes into depth behind his hedge funds, known as S.A.C. Capital Advisors, L.P, and what made them successful. Documentary also goes in great depth about the 2010 insider trading investigation of SAC, where they ended up having to plead guilty and pay $1.2 Billion in penalties, although no formal charges have been filed against Mr. Cohen himself. A great show called BIllions is based off him. Highly recommend this show as well. Watch the full documentary here.
4. Rogue Trader
Thrilling movie based on the true story of former derivatives broker Nick Leeson and the 1995 collapse of Barings Bank. Nick gets hired as general manager of the trading floor on the SIMEX exchange. He ends up gambling all of the bank’s money away and ends up in more than $800 million in debt. Many lessons in this movie about the importance of controlling your ego in trading.
5. Wall Street Code
A Recent documentary that delves into the world of high-frequency trading and computerized market making. My good friend Haim Bodek stars in this movie and gives invaluable insight into what is really happening to retail order flow and just how rigged the system is against retail traders. Several other former quant traders are interviewed as well. You learn how our financial system has evolved since it has become dominated by algorithmic and high-frequency traders since the late 2000’s. Watch the full documentary here.
