Good morning, traders…
Jeff here.
One of the best parts of my career on Wall Street was the stories that came with it.
The kind of stories that make your jaw drop — billion-dollar windfalls, gut-wrenching losses, and risks so high they make your head spin.
But these aren’t just entertaining stories to make aspiring traders mouths water…
Hidden within these wild tales are powerful lessons — insights that can change the way you approach the market … forever.
If you’re serious about sustaining a long-lasting career as an options trader, there’s no better way to learn than from those who’ve played — and won — the game at the highest level.
After all, if you want to be the best … you’ve gotta learn from the best.
With that in mind, let’s go over five of the greatest trades of all time (and the lessons we can learn from them)…
1992: George Soros and Stanley Druckenmiller ‘Break the Bank of England’
In 1992, the financial world was shaken by George Soros, an investor of almost mythical status.
Along with a young Stanley Druckenmiller, he set his sights on the British pound, predicting its decline.
Soros didn’t just sell the pound; he aggressively bet against it by shorting the currency.
To further amplify his gains, Soros also used put options so that he could eventually sell the pound at a predetermined price.
His prediction proved correct when the British government, unable to maintain the pound’s value, devalued it.
This dramatic event, now known as “Black Wednesday,” resulted in Soros making an estimated $1 billion, showing the world the immense power of optionable currency trading.
Lesson for Traders: Soros and Druckenmiller’s success came from having a deep understanding of macroeconomics — and being willing to go against the crowd.
When you believe strongly in a thesis — like they did with the devaluation of the British pound — having the courage to take a substantial position can lead to significant profits.
This story also illustrates the power of options to amplify returns, particularly in bearish environments.
2005: Takashi Kotegawa’s Infamous $17 Million J-Com ScalpAdd Your Heading Text Here
In 2005, a Japanese trader named Takashi Kotegawa made stock market history…
He profited millions on a single trade in J-Com Holdings after its IPO on the Tokyo Stock Exchange.
A trader at Mizuho Securities accidentally sold 610,000 shares at 1 yen each instead of selling one share at 610,000 yen. Ouch.
The huge sell order sent the stock price crashing. And Takashi saw an opportunity…
He bought 7,100 shares while the price was down. But he wasn’t the only one. The low price caught the attention of other traders and investors.
A buying frenzy followed …
Takashi sold part of his position into the bounce and held some shares overnight.
By the end of the trade, he had made more than $17 million.
But even more impressively, Takashi wasn’t a one-hit-wonder.
Throughout his career, Takashi turned an initial investment of $13,000 into $153 million.
Lesson for Traders: This trade highlights the importance of being prepared to act swiftly when an unexpected opportunity presents itself.
Kotegawa capitalized on a rare mispricing event, demonstrating the value of being alert and ready to move decisively.
He proved that it’s essential to stay disciplined and patient, but also that you must be prepared to take advantage of anomalies when they arise.
Having a solid understanding of market mechanics and the ability to execute quickly can turn unexpected events into profitable opportunities.
Take it from me: During the 2010 Flash Crash, I profited $1 million in less than an hour while the rest of the market was panic selling.
2014: David Einhorn Makes $430 Million on Micron Calls
In 2014, David Einhorn, the founder of Greenlight Capital, revealed a bullish stance on Micron Technology (NASDAQ: MU).
Instead of buying shares outright, Einhorn chose to invest in call options.
This approach allowed Einhorn to control a more substantial number of shares than he could have bought directly, amplifying his potential gains.
His strategy was a vote of confidence in Micron’s potential, and a move that showcased the power of options in amplifying trading results.
But what’s impressive is that he was right…
MU started soaring, allowing Greenlight Capital to profit $430 million (4.3% gains on a $10 billion portfolio) in a single month.
Lesson for Traders: The lesson here is simple. When traded correctly, options contracts can increase your returns exponentially.
Had Einhorn simply bought MU shares, he wouldn’t have made anywhere near as much as he did on the call options.
Using options can allow you to participate in large price moves without needing significant capital upfront, making them an excellent tool for smaller accounts.
2015: Mystery Trader Turns $110k into $2.3 Million in 28 Minutes
In March 2015, a fast-acting mystery trader executed a remarkable play that turned $110,000 into a staggering $2.4 million … in 28 minutes.
Don’t believe me? Listen…
This windfall was a result of purchasing 3,158 out-of-the-money call options on Altera stock for $0.35 per contract.
The trigger for this lucrative move was a news release announcing that Intel Corporation (NASDAQ: INTC) was in advanced talks to acquire Altera.
Seemingly moments after the news broke, the trader made the quick decision to buy these options.
The gamble paid off handsomely as the value of the call options soared to $7.60 each — a gain of 2071% — in less than half an hour.
Note that this trader could have been utilizing a sophisticated algorithm capable of rapidly analyzing news,
Such an algorithm, designed to scan and interpret market-moving news instantly, potentially identified the acquisition news as a potential catalyst for a significant rise in Altera’s stock price.
Regardless, this incredible play is a testament to this trader’s shrewd anticipation and their strong conviction in pulling the trigger as soon as the opportunity presented itself.
Lesson for Traders: This trade showcases the importance of reacting quickly to breaking news.
Having access to rapid information feeds and the ability to execute trades swiftly is critical in such scenarios.
It also shows how traders can take advantage of algorithmic mispricing in options…
This concept is exactly what I’ve based my GAMMA Code system on, which has already delivered eye-popping gains of 107%, 265%, 300%, and even 900%, all in 24 hours or less* — sometimes even faster.
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2020: Bill Ackman’s $2.3 Billion COVID-19 Hedge
In 2020, Bill Ackman made headlines with a hedge against market downturns due to the potential impacts of the COVID-19 pandemic.
Ackman’s Pershing Square Capital Management spent $27 million on credit protection for its portfolio.
Then, Ackman made an infamous CNBC appearance, where he told traders and investors that “hell is coming” and suggested that “[Hilton], along with every other hotel company, is going to zero.”
Unsurprisingly, this interview didn’t go over so well with the markets … but worked out beautifully for Ackman’s portfolio.
As markets tanked in March 2020, Ackman’s hedge nearly 10x’d into a profit of $2.6 billion.
While his news appearance was controversial, there’s no arguing that Ackman was right to hedge his massive portfolio as soon as COVID-19 became a reality.
Lesson for Traders: Ackman’s hedge against COVID-19 was a masterclass in anticipating macroeconomic risks and acting preemptively.
This trade teaches the importance of hedging when you foresee potential downturns that could affect your broader portfolio.
For individual traders, this means understanding how to protect against adverse movements using strategies like buying puts or inverse ETFs.
It also highlights the value of being adaptable — Ackman’s shift from bearish to bullish, buying beaten-down stocks post-crash, shows the importance of flexibility in strategy as market conditions evolve.
I hope these trades have taught you some valuable lessons — and inspired you to crush the markets…
Happy trading,
Jeff Zananiri
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*Past performance does not indicate future results
