On January 16th, 1995, with his obscene losses mounting, Leeson placed a massive short-straddle trade on the Nikkei 225. A short straddle trade is when you simultaneously sell a call and a put option. It is essentially a bet on volatility. If the stock doesn't move much, you collect on the premiums; however, if the stock price goes way up or down, people will exercise their calls or puts and, as with selling any option, your theoretical losses are infinite.