If you are just catching us now on this series, over the next few days we will be reviewing 10 of the best trades ever made in the history of Wall Street. We began our series with Jesse Livermore’s sorting of the market and yesterday say how Paul Tudor cashed in on Black Monday after the market crash hit. Today we move to a different continent and era, to learn about Andy Krieger and his dealings with the dollar of New Zealand.

3. Andy Krieger made millions by shorting the Kiwi

Following the Black Monday crash, traders were closely monitoring exchange rates as all currencies began rising against the dollar. As investors rushed to take their money out of the U.S. dollars and looked for safer investment options, certain assets were bound to become overvalued on account of mass market movement fuelled by fear and characterised by rush decision making. A certain trader Andy Krieger targeted the New Zealand dollar, also known as Kiwi, for monitoring, for he considered that its sharp gains would not be sustained too long. Employing the then relatively new investment techniques offered by options, Krieger positioned himself against the kiwi in a move worth hundreds of millions of dollars. So great was his confidence in his prediction in face, that his sell orders, it has been said, actually exceeded the entire money supply of New Zealand! As the kiwi began its precipitous fall shortly thereafter, Krieger closed his short positions making millions of dollars for his company while the government of New Zealand, or so the story goes, made frantic calls to his bosses to get him out of the kiwi.