In the case of Leeson, Gapper and Denton (1997) paint a vivid picture of a person
who seeks to become the master of the universe, managing to gain a reputation as a star
performer. Leeson tried at all cost not to lose that image. When losses were mounting, he
followed a strategy of continuously expanding his position. A quote from Leeson (1996)
may illustrate our point:
“I felt no elation at this success. I was determined to win back the losses. And as
the spring wore on, I traded harder and harder, risking more and more. I was well down,
but increasingly sure that my doubling up and doubling up would pay off ... I redoubledmy exposure. The risk was that the market could crumble down, but on this occasion it
carried on upwards ... As the market soared in July [1993] my position translated from a
£6 million loss back into glorious profit.
I was so happy that night I didn’t think I’d ever go through that kind of tension
again. I’d pulled back a large position simply by holding my nerve ... but first thing on
Monday morning I found that I had to use the 88888 account again ... it became an
addiction.”