Basically everybody was selling Put options and it was guaranteed returns time after time.
Spread Betters were going long, but with maximum daily moves of 3 to 5 pips (with a 1 to 2 point spread), yet a guaranteed low of 1.20, every time it dipped to 1.20 it was a guaranteed win to go long with huge stakes (say, £100+ per point) and stop loss set at 1.1999 meaning maximum loss was £100 to £200 if for some highly unlikely reason things went wrong, but every trade would win £300 to £500 within a few days.
It really was a licence to print money and I considered doing it many times but never actually had the bottle to risk that amount just in case.
In the end the floor collapsed (as would any floor with too much weight upon it). At £100 per point the potential losses on that day were in excess of £4 million.
I’m pretty damn sure we’ll here of SB’ers who lost everything that day.
It was the first thing I thought of when Ken Bachelor was asking about SB firms allowing beyond £100 P/P stakes. Even with his current £400k pot (£800k without unrealised losses), he’d get wiped out in this type of event.