How I Lost £10 Million in One Day – A Story with a Lesson

Losing £10 million in a day isn’t something ordinary, right? As a trader, this is a big loss that will take a miracle to recover from. I have had many surprises including losses and a low S&P 500 index, but none have been as crazy as this scenario that I am about to share with you.

One big lesson I have learned with stock trading is that you should not count your chickens before they hatch; you could be having a good day and then boom! Your investment account plummets in value.

This day is memorable to me. Everything looked normal, and even with an understanding of the S&P 500 floor volatility at the back of my mind, I did not think that the unimaginable could happen then.

The Day Before

I had a great day before my fateful day — smooth and profitable trading, smiling all the way to the bank, fewer curses, and everything good that you can imagine. 

I am an experienced trader who has been in the market for years, specializing in derivative instruments. So, I decided that the following day I would enter into a variance swap position linked to the S&P 500, a popular index representing the performance of the US stock market. Little did I know the fate awaiting me!

The Market Failure

As I woke up to prepare to go and fight with the beasts of volatility, nothing looked out of the ordinary. I never knew that this would be the day I would forever say that I lost £10 million. Otherwise, I would have decided to go out fishing.

As soon as I logged in, the unforeseen started to happen. The market started to drop, and my variance swap position became increasingly exposed to extreme volatility. The sudden and severe fluctuations in the S&P 500 market floor led to significant losses, amplifying the impact on my portfolio. Within hours, the £10 million I had invested was reduced to a mere fraction of its initial value.

A Struggle in Vain

With shaking hands and lost hope, I frantically tried to salvage what I could from the wreckage. This included multiple haphazard and impulsive trades as I was trying to recover from the situation or at least stop further losses. Unfortunately, I realized that the entire market was in panic and that liquidity was drying up faster than anyone could stop it.

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The end was what you’re all thinking right now. The market reached its circuit breaker limit, and trading was halted for the day. What a sad day for me and others.

Lessons Learnt

This is my story; it is how I lost £10 million in a day, or should I say in hours? It taught me some big lessons, and I think it is worth it to share them here.

One, risk management is very important in trading, especially when dealing with the S&P 500 market. Had I set clear risk limits and stop-loss orders and adhered to them, maybe I would be talking of lesser losses.

Two, I should have maintained emotional discipline during the turbulent event to avoid panic and impulsive decisions.

Finally, professional advice is essential. I should seek it in advance every time I could face volatile trades.


Now you know how I lost £10 million in a day. Such a devastating day that triggers jitters in my body every time I remember it. But it is worth sharing so that I can help many people who are just getting started with stock trading. Be warned!

Disclaimer: This content does not necessarily represent the views of IWB.


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