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The claims made previously are not as outrageous as they first appear. Having read the thread I would like to offer an explanation as to how it can be achieved.
A distinction needs to be made between a) someone starting with no positions open and b) someone already in a leveraged position…which is going wrong.
The trader in the latter example could be in the following position:
The trader decides XYZ shares, currently trading at £1 are going to fly when their results are released in 2 weeks.
He purchases £500,000 worth of shares in XYZ, margined at 10%. This requires a deposit of £50,000. This margin can be secured using CFD’s or spread betting in the UK. (I haven’t actually spread bet so the example relates to CFD’s)
On results day XYZ announces two major news items, firstly, a six month delay in production due to supply problems and secondly, the securing of a major new contract worth £XXXX.
At the opening XYZ drops 9.9% as the public panics and sells in response to the warning of a delay. At this point the trader receives a margin call as his account now shows a credit of only £500.
At the same time the smart money is sitting and watching, waiting for this panic selling to abate, realising that the second announcement has far greater significance to XYZ in the long run.
Once the selling has exhausted the smart money enters, resulting in a percentage gain at the close of 20%. Our trader now has his initial deposit of £50,000 + £100,000, from the 20% gain. Total £150,000.
Over the next 3 weeks others digest the significance of the good news released with the results and push the share price up by another 100%. Our trader’s position is now worth £1.2m.
At this point our trader decides to close the position realising a profit of £1.15m before interest and commissions.
This entire process has taken 5 weeks to unfold. During this time the trader’s low point was reached on results day where his account, shortly after the open, showed a credit of only £500, 3 weeks later it showed £1.15m an increase of some 230,000%.
My inference from Lion63 posts is that his friend has been trading since the 1980’s so I don’t believe he turned £500 into £2m from a standing start but instead accomplished this feat by some variation of the above.
Longshot666 seems to be approaching this from the position of; £500 cash in an account, with no positions on to £2m+ in 6 months, which I agree appears incredible.
In conclusion, maybe it’s a question of semantics.
PS: SarahM’s contribution would be even more plausible if it was a variation of the above and because of the leverage involved in options.
Rgds. | 
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