Episode 1 Traders: Millions by the Minute

This programme contains some strong language

For more than 160 years, the floor of the Chicago Board of Trade,

the world's biggest commodities market,

has set the scene for traders to win or lose a fortune in an instant.

'What I can make on a good day could be tens of thousands of dollars.

'I could also lose tens of thousands of dollars and I've done both.'

TRADERS SHOUT

'The market has a way of testing your limits.

'In the middle of June I've lost my year,'

I've literally lost my year, what I'd worked six months for, in a day.

-What?! They're ten bid.

-Shit, not any more!

But the traders' world is changing.

Now, the vast majority of global transactions are electronic and

the markets have grown far bigger and more complex than ever before.

We do over 100 billion of business a day across the whole world.

We will be sending out, at any point in time,

more than a million quotes.

One to two billion!

There is no way that a human being can process that.

But whether traders are competing face-to-face or against the screens,

to succeed in one of the best-paid professions in the world,

the psychological battles remain the same.

There's no other job like it.

You don't have a builder build half a wall on Monday and then

knock it down on Tuesday and then build it again on Wednesday.

It would drive them insane.

Anything can happen at any time

and how well you adapt to it is going to determine your performance.

It's a competition.

From the unforgiving lows to the spectacular highs,

meet the men and women who have chosen

a life inside the ultimate risk-and-reward business.

Golf gives me a chance to get away from all the numbers

and clear my mind a little.

Virginia McGathey often risks hundreds of thousands of dollars

a day to do her job as a broker and trader.

Imagine you having to be at your peak performance,

being able to jostle numbers around for four hours straight.

Taking it downtown!

Focusing and staying sharp mentally and physically,

really requires an enormous amount of energy and effort.

We've had a few people with heart attacks.

The stress of it can really take you down.

Despite the pressures of the job,

Virginia has worked at the Chicago Board of Trade ever

since she started as a runner at the age of 17.

Now she runs her own company dealing in commodities like wheat,

corn and soya beans on the grain futures market.

TRADERS SHOUT

The concept of futures started in Chicago in 1848 as a way to

protect grain farmers and their customers from risk.

Back in the day, they had sampling bags of the seeds

and of the grains themselves, with the actual product from the farms.

A market for buying and selling contracts for the delivery of

grain in the future, meant farmers could protect or "hedge" against

extreme price swings for their crops after droughts or bumper harvests.

And merchants could lock in a purchasing price.

To create a marketplace that allows you to actually leverage

any crop, and to sell your crop

before you've even put it in the ground -

it was a brilliant discovery and that's economics at its height.

TRADERS SHOUT

The concept evolved into today's futures and options trading,

and turned Chicago into the risk management capital of the world.

Now, almost anything can be traded in futures -

energy, metals and currency included.

The value of contracts traded in Chicago alone each year equates

to a whopping quadrillion dollars - that's 1,000 million million.

Seven add nine, minus 15.

But today's traders no longer need to

shout loud and fight for position to make their millions.

FINANCIAL RADIO REPORTS

Now, almost all trading floors are computerised.

So, whether they're dealing with currencies, futures, shares,

or complicated financial instruments,

most of the world's traders buy and sell via their screens.

Piers Curran has been trading like this for 12 years.

I would not be a trader if I was ten years older.

The markets I trade used to be floor-based trading in the pit -

you need a physical presence.

I don't have that, so I think it's a much more level playing field,

and I think markets have become more competitive.

Piers works in the City of London,

one of the world's biggest financial centres, where thousands

trade the markets hoping to reap the potentially enormous rewards.

It's like playing an important football match every day.

You get these butterflies - am I going to win 5-0

and score a hat trick today,

or are we going to get thumped 7-1?

We don't know. This is the beauty of my job.

Morning, guys.

How you doing?

Piers runs his own business,

Amplify Trading, along with partner Will De Lucy.

-So, today...

-Amongst other assets,

Will and Piers trade the global foreign exchange market,

trying to profit from the change in

value of one currency in relation to another.

Today, news from the European Central Bank could affect

the value of the euro.

It's a perfect opportunity for day traders

like Will and Piers to make money.

Ladies and gentlemen, very pleased

to welcome you to our press conference...

This is a global event.

There's people all over the world trying to trade this.

The big question is whether the Central Bank's going to cut

interest rates to help the Eurozone out of recession.

We decided to keep the key ECB interest rates unchanged.

As expected...

In terms of significance, the most significant thing

that has been said is that nothing significant has been said.

It may seem little has changed,

but a smart trader will be reading between the lines.

Central bankers are very good at speaking without saying anything.

Traders and investors are analysing their every word,

to compare his statement this time,

to what he said last month and this is what moves markets.

This is one of the elements which

received a good deal of attention during today's discussion.

Piers has spotted something that he thinks will cause the euro to drop.

He said, "The discussion we had on cutting rates in today's

"meeting received a good deal of attention."

He didn't say that last month.

So that's him telling us, we haven't cut rates

but we're moving closer towards cutting rates.

So I'm really just putting the trade on because of four words.

I'm just going to go short.

More than 5.3 trillion

moves around in the foreign exchange every day through trades like this -

more money than physically exists in the world.

OK. So I'm out of my trade now - yeah, pleased with that -

that was a good trade.

Piers sold the euro and bought more back at a cheaper price,

just two minutes later.

I'm 8,000 in profit.

I wouldn't normally make that kind of return in such a tiny time frame,

it would normally take several hours but it was a high-risk trade.

So that's always the trade-off - risk and reward.

FINANCIAL RADIO REPORTS

While London's traders have already been at their screens for hours,

New York City, America's financial heartland and its stock trading

capital, is just waking up for a new trading day.

At the southern tip of Manhattan, a block from Wall Street,

is T3 Trading Group, a registered broker dealer.

What I love about my job is you can come in every day

and there are opportunities.

Not every day is a great day but there's always ways to make money.

If you do your job well, the sky's the limit.

It is what you make of it.

Scott Redler is one of the company's top traders

and its chief strategic officer.

He's in at 6.30 every morning,

scouring the market for opportunities in big-name stocks.

Apple, Google, Amazon, Netflix,

LinkedIn, Facebook, Twitter, Blackberry -

all household names.

The challenge for day traders like Scott is to spot any short-term

volatility in the value of a share,

and profit from these rapid rises and falls -

often all within just a few seconds.

We're in a fast-moving, real-time market,

so 15 guys could have the exact same idea,

five people might make money, five people might lose money,

and five people might be too scared to get in.

So the more preparation you have,

hopefully we're erasing that fine line.

The rewards are potentially enormous.

Some traders here make several million dollars a year,

but no-one's paid a salary.

What are your top two plays?

That one's in talks with Safeway about taking over Safeway...

Trading with the company's money,

they take home only a percentage of any profit they make for the firm.

-Thanks, Grossman.

-Yes, sure.

If you don't trade well you don't earn.

So, for me, if I can make 1,000-3,000 a day and have it add up

that's my most likely typical month.

I'm guaranteed absolutely

nothing but I've made usually on average 250 to 500 a year.

A few miles uptown, Karen Finerman manages money for the super-rich.

Good morning.

As a hedge fund manager,

she's part of a global industry that

puts a staggering 2.5 trillion to work in the markets.

Good morning, William. We didn't win, huh?

We didn't win, ma'am. Maybe tomorrow I'll have a ticket for you.

-All right. We'll split it.

-Have a great day.

I'm one of five kids, four girls, and my mother,

who didn't make her own money,

pounded this lesson that you have to be financially independent.

To me, money is power. It gives you some degree of control.

It was absolutely important for me to make money and it's fun.

How are you? Good.

I think it's seen as more pure to not want to make money,

and I think nobody looks at that

ambition in a man as a negative thing.

-Metropolitan.

-Karen started her hedge fund,

Metropolitan Capital Advisors, in 1992.

Now the firm manages more than 200 million.

Whether markets are rising or falling,

hedge fund managers like Karen try to outsmart them,

to generate high returns for their investors.

Tracy. How we looking?

She's what's known as a value investor.

Often going against the herd,

her strategy is to scout for shares in companies she believes

are undervalued, in the hope of profiting over the longer term.

We're looking to make a long bet - that's our bias.

I'm an optimist by nature, so I always think if we pick right,

things will go up.

So I find it very difficult to react

to market moves on any particular day.

The idea that I'm going to get it right

and sell at the top and buy at the bottom -

I can almost guarantee you that I will not be able to do that.

At T3 Trading Group, Scott doesn't play the long game.

The market just opened.

He's looking for instant profit -

getting in and out of several trades on the same day.

There goes Apple.

Facebook's negative.

LinkedIn's not doing much.

Twitter seems like it has a little volume, but it's early.

Scott's already got to grips with the latest news.

As a trader, you have to know about what's going on

and then see how it's going to affect your day-to-day.

His analysis is telling him Twitter is about to go up -

so he's just bought more shares.

I added to Twitter through this price that I've been looking at -

this 56 over here.

But the market doesn't behave as expected - the price is going down.

Twitter just fell 55 cents.

That hurt.

Within 60 seconds,

Scott's trade in Twitter has cost him his average daily earnings -

2,000.

That was horrendous.

Oh, my goodness, Twitter's going to hurt.

Sometimes everyone blames the market

but if you have a bad day or a bad trade, it tells you right away.

There's no-one to blame except yourself.

There are some traders out there who punch a screen, break a keyboard

and we have some of them in the firm.

It's a process, everyone works on it.

35 minutes after the market opened,

Scott's looking to recoup his losses.

Baidu's strong. Let's see if I can make another move there.

He's just bought some shares in Baidu,

the Chinese equivalent of Google.

This one had good earnings and it seems like

it's something that could go.

Scott's right. Baidu's price is rising.

Eager to make a profit, he quickly sells the shares he's just bought.

That was a 500 trade in a three-minute time period,

and with the way my day is shaping up,

I just wanted to take some trades and let the day add up.

That was a nice little tactic.

But Baidu's price continues to rise and 20 minutes later,

Scott's realises he could have made much more profit if he'd waited.

Baidu's a monster. I got out of that too early. That was strong,

I should have kept that one and that right there is frustrating.

Little things hurt,

so you got to make sure you stay positive

so that those little things don't continue to cut you up.

-PHONE RINGS

-Metropolitan.

-What did we buy 182?

-183.

-183?

Although she keeps a close eye on the day-to-day value of shares

she's invested in, with many millions of dollars at stake,

Karen often has to hold her nerve.

For her, it's all about the bigger picture.

Ukraine is in upheaval right now.

The US market is down 230 now, which is a meaningful move -

fear in the marketplace.

Our job is to determine is this really relevant to our companies,

or is this noise?

And we tend to think it's the latter, so it's difficult to lose money,

which we will do, on a day like today.

Yet, I don't think that the fundamental stories of

any of our businesses have changed at all.

FINANCIAL RADIO REPORT

The rich rewards that come with successful trading make it

an attractive prospect for many.

In London, experienced traders

Will and Piers use their knowledge to train other people.

Today, ten new trainees are about to discover

if they have what it takes to become traders.

I set up a couple of companies.

Got far too much money far too quickly

and got involved in some rather stupid things

and losing it all in spectacular fashion.

Ben Marsh has paid to come on Amplify's four-month course

to learn to trade with his own funds.

Personal circumstances are also a reason I'm here

because I've got married.

And I've been able to live a pretty good life as a single guy,

but suddenly if you're going to have a wife, family, kids,

this will hopefully be an avenue for me

to build a good environment for my family.

Don't try and kid yourself that this isn't very difficult. It is.

Can you be OK with the fact that losing money is part of the job?

Will and Piers believe that most people find it far harder to

acquire the psychological and emotional skills

than to master the technicalities of trading.

Sports psychology and trading psychology both need the

individual to perform at the best of their ability,

at the time that it matters.

You can't retake a penalty against Germany in the World Cup.

What makes a good trader is somebody who can manage risk

and who can control their emotional state,

so that their decision-making process remains clear and logical.

Ade Maradesa has just finished a master's degree in business

and wants a career in investment banking.

When people say money's not important or money doesn't count,

it's because you have loads of it.

Making money and being able to do the things

you want to do in life is very, very important for me.

The journey the trainees are about to embark is something

Will and Piers understand only too well.

They cut their teeth as young traders in the boom years

of the mid-noughties working on a large trading floor in Canary Wharf.

Canary Wharf has great memories for us.

That period of time was almost too good to be true.

In January 2005, Piers made his best-ever trade when rumours

about an earthquake in America set off a huge market reaction.

The German bond markets began pricing this in very, very rapidly

as a major situation.

We were able to take advantage of the short-term inefficiency

in the market's behaviour.

The profit was 120,000 euros

and I think I finished work that day at 9am.

But I guess once you have a big trade like that,

it's very important, psychologically,

to perhaps just sit back.

You're so euphoric that if you try and carry on you'll tend to

give back a lot of the profit that you've already generated.

They may have made big profits, but they also made big losses.

We started at the same time - I was doing very well

so I was allowed to risk a lot.

However, this was after a number of months of stellar performance,

then two days poor performance, and so mentally,

I was in a situation where I wanted to make back,

which is exactly what you shouldn't do.

I kept on trying the same strategy which wasn't working -

it wasn't working and I kept on trying it.

So the risk manager came over to my desk,

turned everything off, "Come into my office."

-BOTH:

-The walk of shame.

He sits me down and he goes,

"Disappointing doesn't cover it. Get out."

I tell you what, your ego takes a big, big hit.

And probably rightly so, actually, cos as soon as you start thinking,

"Right, I can just make this back and push this market around,"

then you learn a lesson every now and then.

Back at Amplify's offices, the trainees are about to

experience those high and lows of trading for the first time.

OK, guys. Some important economic data coming.

They're trading real markets, in real-time,

the only thing that's not real is the money.

You have one number to listen to - I want to see you reacting,

OK? That's the job.

'215,000, that's higher than expected.'

We can't tell before someone starts how their inner character is going

to display themselves on the market

in a period of total uncertainty and risk.

There's nothing more uncertain than the markets.

Will is able to monitor the trainees' every move

and can assess how well or badly they've traded.

First up is Ben.

For a new trader, this can be quite common.

Every time there's movement, they're selling,

buying, selling buying, and that's something

you get out of with the more experience you get.

When you first sit in front of the screen it's a bewildering

series of charts, and arrows and things flashing at you,

telling you stuff. At the moment it's almost all luck.

It's very, very demanding.

This is the first time I'm trading and I'm just beginning to

get to know the concept.

But right now this is all foreign to me.

It's definitely been a difficult day for Ade.

He's been buying whilst the market's been moving lower.

He's just been the wrong way round all day.

When they get halfway through the course, any of the trainees

who are doing well will move up to trading with Amplify's real money.

I'm really pleased that you got to

see how the market can change so violently.

It makes you realise that anything can happen at any time.

OK, good.

They'll go through cycles of confidence,

a feeling of ability and then they'll have a bad experience

and that's when the real test of the mettle comes.

-PHONE RINGS

-Metropolitan.

For Karen, the performance of a hedge fund is personal.

Like many managers in the industry, she's staked her own money on it.

I'm a big investor here,

so I know what it feels like to lose money and that's bad.

But the feeling of losing money for someone else is far worse.

There's something about failing them, something about not being

able to deliver, even in the short term, that's very painful, stressful.

But work's certainly not the only stress in Karen's life.

DOG BARKS

Oh, you're big and strong!

'I don't know how we ended up with a dog.'

My kids were just begging and begging me and I really held

the line for a long time and then we just we just caved.

I mean, he's adorable, we love him,

but, oh, my God, what a pain in the ass, you know.

'Just scheduling Jessie alone is really a lot.'

I think he needs a haircut, Kate.

To help run life at home,

Karen has a dog walker and a housekeeper.

Having not one but two sets of twins,

she also has an assistant who helps manage the children's schedules.

So this is the motherboard. Each child has a different colour coding.

It's a bit of complicated life, but I can't imagine any other way.

I don't know what it's like to have one child at a time, that's something

I've never experienced, so I just feel this is how people have kids.

Jessie, come here!

Karen's Park Avenue apartment is also

a haven from the pressures of a demanding career and family life.

So this is the living room. This space really right here,

the gallery and this room,

this is why I fell in love with the apartment, this is why I bought it.

I'm happy to just sit and read, it's very calming.

Often in New York it's very cramped and you don't have the feeling

of a lot of space.

That's why we love this apartment - it has the feeling of a lot of space.

Despite the luxury her success affords her family,

Karen likes to keep her children firmly grounded.

My husband likes to tell them, "Mommy and I have enough money,

"you guys have to go out in the world and make your own."

The idea that they can do nothing, that's absolutely not allowed.

Hey! Look who it is!

What kind of medal did you get?

Scott's also very aware of the impact trading can

have on family life.

-I lost by one point.

-That's OK. Did you hustle?

Yes, I did.

I try and switch off from the markets when I get home,

but you always have a thought in the back of your head,

"What's going on in the markets?

"How are my positions going to do the next day?"

So it's easy to get caught up in that so I try not to...but it's hard.

Scott is convinced his discipline as a trader is

boosted by his passion for endurance sports.

He's done more than 30 triathlons

and two Ironman contests - one of the toughest races on the planet.

I think there's a lot of similarities between

high-performance sports and trading.

When you're out in the race, it's you versus you -

your system, your process.

And the same way in trading, you're in control of your day.

It's really all about you putting yourself

in a position to succeed on your game plan.

FINANCIAL RADIO REPORTS

The trainees in London are nearly a month into their course,

and Piers is assessing their performance.

Ben's managed to make a profit.

So far, so good, really. Could be beginner's luck.

I mean, the amount I've made is tiny.

Like yesterday, I struggled very hard all day to make princely

sum of 12.50,

but it had taken such determination to get to that point.

Carlos Matos, a digital consultant looking for a career change,

has caught Piers' eye.

He's been particularly active in the markets

and could be getting into risky habits.

So, Carlos, the trading machine,

who must have repetitive strain injury in his right index finger.

So this is his big problem - severe overtrading.

Ade appears to have the opposite problem.

Last week, Ade made one trade in the whole week.

One single trade,

and, therefore, isn't learning.

But it's hard for these guys to take risk that naturally they're

uncomfortable with.

But it's only going to get harder.

Today, the trainees will have to

react to news from the Federal Reserve -

one of the biggest announcements of the month.

Good afternoon...

Let's review the upcoming big event.

The big question is whether the Fed will reduce, or taper, the billions

of dollars it's spending each month on stimulating the American economy.

No matter what happens today,

you're going to get some decent market reaction.

The market thinks no taper today.

Ten seconds...

Don't feel you have to jump in and you have to trade,

it might be quite chaotic.

If you lose control of your risk you will be chewed up and spat out.

Good luck.

'The Fed has tapered a 10 billion taper...'

OK, guys, that was a 10 billion taper.

This is more tapering than the market has expected,

so just be careful, you can see how much noise there is.

This is crazy.

A second announcement,

saying that interest rates will stay low, is causing even more confusion.

Bottom line, the Fed have surprised us,

They're saying that the economy's very strong,

but on the other hand they're saying we're still concerned

about the fragility of that recovery,

so we're going to keep interest rates very low for longer -

two contradictory things happening at the same time.

And what you get with that is market chaos.

And it's very hard to trade chaos.

But "trading machine" Carlos hasn't been able to resist jumping in.

I did a quick one, like a sell/buy, five seconds.

Well, pretty dangerous on the risk/reward

because if you didn't get the buy after the sell,

you could have got hit by quite a large amount.

Will has been monitoring the trainees

and their progress is a pleasant surprise.

No-one's had a car crash.

The fact that you keep on being taught dogma -

discipline, discipline, discipline -

has done you well.

I was up 625 and very quickly lost 287 in the euro

but luckily, the S&P was much better

than the euro was bad, so a good day.

I did something I'll probably never do again.

I just sold and bought again after a few seconds

and I made a profit of 275.

It's a very risky move and I just did it today

because it's the end of the month

and I just wanted to have this thrill.

Although the trainees have had a good day

with their simulated money,

Amplify's professional traders haven't fared so well.

The more experienced guys

had actually lost their discipline more than you.

The more experienced guys had traded with too much confidence

when the market was uncertain.

In the end, we lost money as a firm.

Some of our guys had their worst day for months,

Some have lost profit they've been building

over the course of the last week

that has gone in 30 minutes.

But the trainees had their best day of the training course so far,

so...go figure.

At the end of his first month,

Ben's feeling chipper about his progress.

So far, I've loved every moment of it.

You know, I've found something that you can earn a living from.

It's a challenge cos it's so bloody difficult to nail it.

Ben has recently got married to Francoise,

who's been on the receiving end of his venture into trading.

He always talks about the same.

He has become grumpier, but since I told him,

he's put some effort into not being too grumpy.

It's very much an internal process

and it's not particularly easy to explain.

When you do it at home, I will understand better, I guess.

Yes, the strangled sounds of shouting coming from the study.

SHE LAUGHS

With the prospect of starting a family,

after finishing the course,

Ben hopes to trade his own money from home.

Until you find something that really motivates you,

you're not going to fully engage.

This is something I can fully engage in,

partly because it's so difficult, partly because it never lets up.

You have to be on your game all the time.

Usually the first thing in the morning,

I will grab my phone and kind of take a look at where the market is.

As a commodities broker,

Virginia McGathey is always plugged into the markets

and the news that influences them 24/7.

The problems happening in the Ukraine,

the weather issues in South America, Australia, China...

All of these markets are open round the clock

so when we wake up in the morning,

all that information just comes flooding over.

So wheat's down seven cents, corn's down one and a half,

soybeans down two...

I need to buy four.

As well as acting for clients,

Virginia sometimes trades for herself.

Thanks, Randy. OK, bye.

Yay!

That's good.

She's just made a profit on wheat before she's even left for work.

That's about 1,700 - that's a good morning.

The true currency of the world is number one, water,

number two, food and number three, energy.

Being in the commodity market,

I really have my thumb on the pulse of the world.

Today, the grain market could be particularly volatile.

The US government is due to release its monthly crop report,

which will reveal the total supply of staples like wheat.

This is really important to all the investors, farmers,

anybody that has anything to do with the grain market.

If the crops are hurting

or if the drought weather is really affecting the market,

that's really what's going to dictate what's going to happen.

It's a true supply and demand situation

and that will dictate the prices

and believe me, there's going to be a number of people

that are going to be betting whether the market's going to go up or down.

Bob Lassandrello has worked at the Board of Trade for 35 years.

You go to the place, you make something out of nothing every day,

it's, er...you know, it's a dynamic, really challenging place to be.

He trades futures in cattle.

There's so much ego and so much personal identity involved

in being a trader -

it's about money, but it's about everything else too.

Bob's what's known as a "market maker" -

taking the other side of a trade

when buyers and sellers want to get in or out of the market.

He does this with his own money - a high-risk strategy.

When you're right and the market's going your way,

you get a real buzz.

It's an excellent feeling.

Hey, Kevin, did you get the 4-45?

Is it addictive? Oh, hell, yes.

Oh, yeah - anybody that tells you that it's not

would be...not being truthful.

What, want me to come down and fill them out for you, too?

'I did trade a lot for better for worse.'

It was...I had a little bit of a trading problem.

-INTERVIEWER:

-A trading problem?

I'm kidding - it's...like, an addiction,

I traded...I traded a lot of contracts.

But as a young person coming up in this industry,

it was definitely a problem.

You have to transition from the super-high energy thing

to just, "OK, now go home

"and...change the baby diapers", or whatever.

Caused some issues throughout my life -

thankfully, I'm still married to the same woman after 36 years

so that's, er...a good thing.

I don't know how common that is.

I want to sell the May 15 950 calls and buy the 650 puts.

CLAMOUR AND SHOUTING

At 11 o'clock, the Government crop report numbers

will reveal whether there's a surplus or shortage

of wheat, corn and soya beans.

This report is going to go out,

all the trading desks are going to be taking a look

at what their position is.

Hi, this is Randy over in wheat.

There's less wheat than expected.

Being scarcer, the price should rise.

But there seem to be more sellers than buyers,

so it's actually falling.

Trading for herself, Virginia spots an opportunity.

Buy four wheat, buy four wheat.

Betting that the price will rise due to the shortfall,

she buys wheat.

But with other positions she has open,

there's confusion about what she's sold, or is short,

and what she's bought, or is long.

How many am I long?

CLAMOUR AND SHOUTING

Just look on the book, look on the book.

It's not coming up, Ginny, that's what I'm telling you.

'It's very easy to make a mistake and when market's moving very fast,

'there's big risk on the table,

'the mistake could be tens of thousands of dollars.'

Oh, you couldn't see the average, I see, I see. That's OK.

It's now been 15 minutes since Virginia bought.

-28 a quarter.

-Sell four.

As she predicted, the wheat price has rallied

and she's sold at a profit.

So, look where we bought, and sold those up there.

Nice job.

Spectacular work.

Thank you.

'I had a very good day today.'

4,200 - so, it's not too bad,

I mean, I know the value of a dollar, I can appreciate it.

That helps towards a nice dinner tonight, for sure.

'You've been listening to morning reports on 5 Live, it's 5.30.'

'There's been panic on the stock markets this morning...'

It's the start of month two for the Amplify trainees.

Ben, who was doing well until now,

has seen his profits take a sudden dip.

When it's at its best, it's a bit like playing tennis

or playing piano - you don't notice you're doing it.

It's when it's going crap that you have to think about it a lot

and you're aware of everything you're doing.

It's almost as if you're operating through a filter of incompetence

and mishap.

Although they're still not trading with real money, this month,

the trainees will be assessed on their profits at every stage.

Those who do well will move up to trading with the company's funds.

The most important factor of this next step is psychological

and the feeling of being incorrect or losing money is exaggerated,

it's much higher than when it was just in the training room.

There's a chance for Ben to improve his performance this morning

with the release of American oil figures.

The market's just dropped by 50 cents.

The price of crude oil is plummeting.

It's a great opportunity to short it -

to sell it and then buy it back at a lower price.

But the trainees need to react quickly.

A lot of them are going short now, which is too late.

They've seen the market react,

but weren't able to commit to the trade,

they weren't confident enough.

That's Ben, selling right at the very bottom.

So Ben's lost 100 simulated dollars.

He will know what he's done wrong but it didn't stop him doing it.

The other trainees are struggling too.

Kieran, an accountancy graduate,

hasn't reacted quickly enough either.

It's a little bit of a slow reaction.

That's about ten seconds, which isn't particularly fast.

-INTERVIEWER:

-That's not fast?

-No, that's not fast.

You're competing against everyone else in the world that's hearing this news.

And, actually, in these markets now,

you're also competing against machines and algorithms.

So, yeah, you do need to be fast.

It's the end of the trading session

and Ben's kicking himself over his earlier mistake.

I went in very aggressively, but I got caught -

lost 100 bucks very quickly, which is a painful thing.

It is brutal, how financial markets can grind you down.

It's quite a vicious circle -

once you're in that confidence crisis,

it's very difficult to reverse it and come out positively.

It does test you all the time -

you are just there before whatever the market throws at you.

And if you make a mistake, you cannot hide from it.

Nearly 25 years ago, while in his 20s,

Ben made the biggest mistake of his life

and paid for it with a prison sentence.

-REPORTER:

-Two clever young men from the finest backgrounds...

After graduating, Ben went into business

with old Etonian Darius Guppy.

Guppy was best man at the wedding of the Princess of Wales' brother,

now Earl Spencer.

Marsh and Guppy had it all - social status,

brilliant academic careers at Oxford,

the directorships of a gem dealing company

in London's Jermyn Street.

When their business ran into trouble,

they embarked on a reckless plan.

In New York, they nearly pulled off the perfect crime.

They told police they'd been robbed of their collection

of sapphires, emeralds and rubies at gunpoint.

Insurers paid out £1.8 million.

But the fraud was later uncovered.

Of course it was the wrong thing to do - wrong, stupid,

when you're squatting on a bucket in Brixton,

and you've had a good start in life

and you've ended up, you know, minus your freedom,

you think, "Maybe I've made some fairly moronic life choices here."

And it's only by looking at yourself and seeing what you've done wrong

that you can actually then move forward

and learn lessons in life.

Luckily, I've had 20 years of making the right choices

and I have a very clear idea of what a risk-reward is.

And that, for what I'm doing now, is a useful lesson

because every decision I make is my choice

and I stand or fall by it in the markets.

In New York, hedge fund manager Karen Finerman

also manages to squeeze in twice weekly appearances

on one of America's most-watched business programmes.

So can you see the transformation taking place? It's magic.

SHE LAUGHS

When we first started the show,

I would have to leave before 4 o'clock

and I found that to be an unacceptable trade off -

I manage money, I want to be here and doing that

until the market's closed.

286...

Straight after the 4pm close,

Karen dashes to the studio in Times Square

to record Fast Money,

joining a panel of savvy professional traders.

-Look at you.

-And look at you!

SHE LAUGHS

Fast Money starts right now, live from Nasdaq Market Side

in New York City's Times Square.

I'm Melissa Lee. Our traders tonight are Tim Seymour, Brian Kelly,

Karen Finerman and Guy Adami.

Fears that the crisis in Ukraine

is weighing heavily on US investors

as Russian troops go into Crimea...

And Karen, you're taking a look at potential nat-gas disruptions.

Right - really, the one trade we made on Ukraine getting worse

is if there was disruption to natural gas...

'You really can never fully be away from the weight'

of performance and how the portfolio is positioned.

There is always a measurement.

There's always somebody way smarter than you out there,

way better.

But trading performance isn't always about smart instincts

and well-informed opinions -

sometimes, it's about speed.

One of the fastest and most prolific traders on the planet

is Remco Lenterman.

Trading at the speed of light, his company, based in Amsterdam,

does more than 100 billion worth of business every day.

Maybe five years ago, our markets were measured in the milliseconds,

that's a thousandth of a second.

Today, most of the large exchanges in the world are transacting

in matters of microseconds

and microseconds is one millionth of a second.

He's part of a controversial and highly secretive industry

usually closed to the outside world.

But convinced of the value he brings to markets,

Remco's prepared to open his doors.

IMC Financial Markets trades on more than 100 exchanges around the world.

But it's not the humans doing the trading here -

it's the machines.

1-2 billion.

That's aggressive.

High frequency trading uses sophisticated algorithms

and ultra-high speed networks

to buy and sell millions of times a day.

Remco's traders are a new breed -

more likely to be science, engineering or maths graduates.

Just like a pilot will do in a plane, our traders manage the autopilot.

So they manage the algorithms,

they tweak the settings continuously,

they'll check if there is something happening

that the algorithm may not be able to deal with in a correct manner,

but they manage the process.

IMC uses these algorithms to make markets,

offering a buy or sell price on millions of trades,

from each of which it takes a tiny sliver of profit.

This ensures liquidity,

so that buyers and sellers can get in or out of the market at any time

because there's always someone to complete the other side of a trade.

If I'm making a market on ten different exchanges,

I'm sending out 40,000 prices.

And each time there is a change in the market,

all these prices need to change and they need to change very quickly.

There's no way a human being can do that.

The Dutch are always very early adopters of technologies

and they also have a healthy appreciation

that when there is a paradigm shift in a market,

you need to adapt yourself to it.

After more than 35 years of trading futures in the pit,

Bob's considering his own future.

95% of all trade coming through Chicago is now done electronically,

which has drastically reduced business on the floor.

I trade today, on a busy day, maybe 400-500 contracts a day.

When I was busy during the old days, I would trade 5,000 contracts a day.

So now I make 10% of what I made five years or ago or whatever.

Bob now spends most of his time in front of the computer.

Even when the market moves a lot it's just pretty frigging boring,

I'm just not that interested.

It doesn't play well into what my strengths are as a trader

and that's kind of reading people, I guess, fundamentally,

when it comes down to it.

Did you know that there's a high correlation

between consumption of cheese

and the number of people who die after getting tangled in bed sheets?

For us old pit guys, this is kind of funny.

ALL SHOUT

'In the pit, it is kind of like a giant poker game.

'You can see the fear in that guy's eyes,

'or you can hear the change in that guy's voice.'

Hang on, I'll be right there...

'You sort of knew which brokers or traders were representing themselves,

'which ones were representing speculators or funds,

'so as a result you kind of knew what they might be doing.'

Traders now need very different skills.

Electronic markets are bigger and faster,

and the ever-accelerating speed of transactions

has attracted the attention of regulators

concerned about transparency and instability in financial markets.

In this facility we'll have about 200 or so servers,

and you'll see that they all have names,

just like a farmer will give their cows names

so that we know that when Smaak fails,

we know that's the one we need to replace.

I think that there is an industry of critics

that want to believe that there's a whole bunch of people

in the financial industry that are providing zero value.

We do millions of transactions every day.

If I switch my machines off tomorrow

then everybody that did business with me today

will get, potentially, a worse price

than they would have otherwise gotten.

5 on 50!

90 on 20!

Having placed his trades for the day on the computer,

Bob now ventures into the pit for the last half hour of trading.

It's the only time when there's still enough business

to make it worth his while.

10 on 200, in case you want to get out of them.

10 on 300!

HE CHUCKLES

Most trades are done in the final minute,

as traders try to get in and out of positions

before the closing price is set for the day.

Buy 'em, buy 'em, buy 'em...

ALL SHOUT

Buy 'em! Buy 'em! What the fuck?!

90 bid!

Bob thinks he's just missed out on a profitable trade

because of a misunderstanding about price.

No, no, no.

80 bid! 80 bid!

-Geoff, what did we do?

-Just hang on.

'When there was more trade in the pit it didn't feel quite as significant.

'But people are really scrambling, and there is an element of panic

'because if you miss this trade that's it.'

-Did I get anything over there?

-It goes back to Steve.

Having lost out in the pit,

Bob now checks the closing price

to see how the trades he placed in the office have done.

Where did it settle at, 27?

32, it settled at?

Fuck, we should have been selling these...

Bob's strategy for the day has been wrong.

The market has moved in the opposite direction

and he's bought when he should have sold.

I'm a fucking idiot. It's fucking brutal, pardon my...

So, what you going to do?

There's always tomorrow.

Bob's computer trades have cost him an entire week's earnings.

All the profits I had up to this point were gone after today's close.

I'm not happy, but it's not going to ruin my day.

If you can't deal with it then you're in the wrong business.

I had this little thing when I was trading a lot,

and I would have, like, a relatively bad day,

I would go buy something.

Just something that was not super extravagant,

but at least it kind of reminded me that I wasn't broke

and I wasn't as big of an idiot as I felt like

after I walked off the trading floor.

For me, bad days were very emotional,

I assume they are for other guys too, and I'm not really sure why.

It feels very personal when you lose money.

It's crunch time for the Amplify trainees.

Today they will be told who gets the opportunity

to trade with the company's money.

Ade's still not trading enough

for Piers and Will to assess him properly.

They think he's still scared of risk

and they're trying an exercise to force him to confront his fear.

Ade, when you have traded it's been good.

But it's still only one trade a day.

You've got seven different assets to choose from -

if I haven't seen you get in a position,

then I'm going to come over and get you in a position,

and in a larger size.

Will and Piers now have to apply their own risk management skills

in deciding who to back on the live market with their own money.

# Catch a falling star... #

-OK.

-Yeah.

-So...

If you speak to Ben he will say to you with a very straight face,

"I am not an emotional trader, it doesn't affect me,

"I have a very calm approach to my decisions,"

when actually he is one of the most emotional traders I know,

-because he's so competitive.

-Yeah.

He's going to find that a struggle.

-Let's move on to...

-Ade.

Still with a very good attitude, but painfully cautious.

We had a good chat, and he said, "I understand things now,

"I'm really going to start to push it out". He hasn't.

Ade has been forced into a large trade on the German share index,

the DAX - the most unpredictable and tricky to trade.

He's sitting on his biggest ever loss.

3,587.

It's been really, really, really emotionally draining.

OK, Carlos.

He's trading nine markets at the same time, there.

-Yeah.

-I mean, that's impossible.

I couldn't do that.

-He has no fear.

-But I think in the long run he's benefitted

from the fact that he's been very active, in that he's learnt a lot.

While Will and Piers have been deciding who to back

with their money, Ade's spent nearly five hours in his losing DAX trade.

We forced him into this to really open his eyes a little bit.

He's recovering some of the loss now -

he's 2,500 euros down now rather than 3.

But he's not enjoying it.

What happened today with that DAX position -

do you think that has opened your eyes a little bit,

or do you think that's made you more fearful of having trades on

in volatile markets?

It goes either way.

Yeah, well, this is what I'm worried about,

cos at the moment - like, last week you traded once all week.

It's not enough for us to put you on the live market.

-You need more exposure to trades.

-Yeah, definitely.

-Yeah?

-Mm.

-OK.

So, here's what's going to happen. Next week you're going live.

-Right!

-OK?

-OK.

But...

narrow down the markets you're looking at.

Very good month one, bit of a dip in month two,

but you've come back, and I think...

I think you're ready for the live market.

-Lovely.

-And we will kick on from here.

I shall make us both some money.

-There we are.

-Deal.

-Good plan.

-All right. Good stuff.

-Thank you very much indeed.

The successful trainees are a step closer

to joining the ranks

of one of the most financially rewarding professions in the world.

As well as her many other commitments,

Karen's also on the board of a major charitable foundation.

36?

She's on her way to one of its biggest fund raising nights,

which attracts plenty of Wall Street movers and shakers.

So tonight is the Michael J Fox poker event.

Not really understanding the game well enough,

I don't know how to play, and I don't want to lose money.

If it's for charity, OK, I'll lose money.

After he was diagnosed with Parkinson's at the age of 30,

actor Michael J Fox set up a foundation

to find a cure for the disease.

So far it has funded 450 million worth of research.

You get much more satisfaction out of philanthropy

than buying something, and the Michael Fox Foundation,

I think, does it in a very smart way.

It is very businesslike, it's very scientific.

They want to find a cure and go out of business.

Like any good gamblers, we hedge our bets by plying you with alcohol,

-so...

-LAUGHTER

Have fun everybody, good luck, let's deal...

All right, here we go!

Definitely a big Wall Street crowd.

You know, there's sort of an intellectual element to poker

that I think is appealing to a lot of Wall Streeters,

mostly hedge fund guys.

Oh, wow.

Just like trading,

poker is a contest of skill, risk and reward.

Reading the odds and your opponent are crucial to success.

-He has an ace.

-He has what?

-He has an ace.

And you know that why?

This guy has...

'The guy who is sitting to my left...'

he's actually been fairly helpful.

But I got him snowed - he thinks I don't know what I'm doing.

Didn't I fold already?

-Fold in two.

-OK.

The tournament winner was Karen's poker buddy,

hedge funder Justin Lepone.

The night raised more than half a million dollars.

VIDEO PLAYS

At Amplify, six of the ten trainees have been launched onto the markets

with real money.

I feel more relaxed with it being real money.

I actually found the idea of getting uptight about a concept

curiously uptight-making - which sounds bizarre.

I'm happier to have something concrete and real.

Ben has performed so well that the size of his trades has been doubled.

Still uncomfortable with risk, Ade has not progressed to trading live.

He's decided to call it a day, and that his career lies elsewhere.

The trading in itself was becoming very, very difficult,

and I just thought, "You know what? I've had enough, I should move on."

It gets pretty tough pretty quickly.

Financial markets don't take any prisoners,

so if you're not 100% ready then there's no point.

-Can I get a black Americano, please?

-Of course you can, young man.

There was concern that an overactive Carlos might be a risk

when trading with Amplify's funds.

But instead, he froze.

He morphed into a completely different individual.

Carlos, as many do, fell over

just purely for the psychological pressures of dealing with real risk

rather than simulated risk.

-Thank you very much, Maria.

-You're welcome.

-Cheers.

I lost the first trade I did with their cash.

I lost 40, and it hurt me like it was like 40,000.

I was really struggling

with the thought of trading with someone else's cash.

Preferring to take the risk on himself,

Carlos has now switched to trading his own funds,

which has brought about a further transformation.

The first day of this change Carlos had his best ever day.

He made well over 500 - in fact, that week was his best ever week,

so it's amazing what that can do.

I feel more empowered by using my own funds.

I think I can do it - but you cannot just come to the office

and just click on a button. This is a long-term game.

DRILL WHIRS

Monday night, you should have these stairs completely framed.

During his 35 years as a Chicago pit trader,

Bob has had to adapt to massive changes in the markets.

Now he's planning a future away from the floor.

He's investing 2.5 million into turning a former car workshop

into a microbrewery.

Starting as a trader at such an early age,

you end up really depending on your ability see problems and solve them,

so the idea that this as a project would be beyond me

never occurred to me,

and I also think that once you get to a position

where you are a little more comfortable with risk

on a personal level,

the idea of risks aren't as scary.

I've traded for so long,

I've reached a point in my life where I think I'm ready to stop.

I sound like a heroin addict, but I do have a lot riding on this.

I have a lot of money bet on this and I hope this is busy enough

and successful enough that I won't have the time or energy to trade.

Everyone, take a spot. You can come on in.

Everyone, you can take a seat and eat inside.

After 30 years on the floor,

Virginia too is thinking about moving on.

So there are four generations here today

to honour my mother on Mother's Day.

We're here at the yacht club trying to enjoy a nice afternoon lunch.

No fewer than 12 McGatheys have worked for the family firm,

including many of Virginia's nieces and nephews.

What we've learned most in my family is we know how to make things happen

because of being there.

My grandma calls it shifting - you have to shift,

and it's the Board of Trade culture, it has shaped us all.

With trade moving away from the floor,

Virginia's planning to use her skills

to start a new family business in renewable energy.

Energy is a commodity, it's a consumable good and I know that,

I know that business, I know that industry

and everyone, I think, in the end

looks to find a way to be significant.

McGathey, whoo!

NEWS REPORTERS: 'New figures show Britain's services sector...'

'There's been panic on the stock markets this morning,

-'with shares dropping...'

-After four months of training,

Ben finally feels ready to trade with his own money from home.

BELL RINGS

-Today, his new equipment is arriving.

-Hello?

All right, brilliant, coming down. Thanks a lot. Cheers.

'Very excited, yeah. This has always been the end goal.

'Today, a gleaming four-screen system will be arriving.'

Hi, there, how are you doing?

'I am looking forward to it

'and now it's with my own money, so it's even more important.'

He has been dreaming of it

and I'm glad he finally found the right thing to do.

Fairly straightforward-looking diagram.

'I always expected myself to do well and then you allow yourself

'to get a bit cocky and that's when you get bitten.

'It's a game of emotion

'and it's going to take me a long time to get really good at it.'

And voila.

-The wings of financial opportunity.

-Ah, it's funny, huh?

-Cool.

-Yeah, that's exciting.

And hopefully it's going to be fruitful.

There, in front of me on the desk, is my future, and I can't wait.

MUSIC: I Need A Dollar by Aloe Blacc

Next time, the digital revolution that has enabled anyone

to join the trading elite,

by playing the markets from home.

You can either look like a trader or actually be one.

But can they really beat the pros at their own game?

My account value is 1.6 million.

I can't believe how easy it is to make money

# I need a dollar, dollar

# Dollar, that's what I need, hey, hey

# Well, I need a dollar, dollar

# Dollar, that's what I need, hey, hey

# Said I need a dollar, dollar

# Dollar, that's what I need

# And if I share with you my story

# Would you share your dollar with me?

# Bad times are coming

# And I reap what I don't sow, hey, hey

# Well, let me tell you something - all that glitters ain't gold... #