At first his strategy appeared to work. But speculators soon became pessimistic
about the prospects for the Japanese economy and in one day alone
the Nikkei fell by 1,175 points. Amazingly, Leeson was still able to report
some profits to Barings, and maintain his image of a successful trader.
However, the reality was that he had lost approximately £100m in the
space of about 10 days following the Kobe earthquake. Fernando Gueler,
Head of Futures and Options Trading for Baring Securities in Japan, simply
could not understand how Leeson was apparently able to trade at a profit
during this period. Gueler did not suspect that Leeson’s positions were not
hedged and was only to learn the truth later in February 1995.