by John Pangere, CFA, Strategic Investor
Syed Shah had a plan. On April 20, the 30-year-old from Toronto decided to take his $77,000 account and trade oil futures.
In a few hours, he lost $9 million.
It was innocent at first. With a price of $3.30 per barrel at the time of his first trade, Shah dove in, buying an initial five contracts. He added 21 more as the price moved lower. In total, he scooped up $2,400 worth of oil futures in 40 minutes.
Finally, when the price flashed one penny, he went all in, snapping up another 212 contracts. Feeling confident, he shut off his screens and went about his day.
The problem was the price of oil kept slipping. It went to minus $1, then minus $10, eventually settling at negative $37.63.