As Mr Leeson bought the futures contract with abandon, the main Japanese brokerage houses were betting against him by selling the contracts short.
By Wednesday 22 February, the day before Mr Leeson was last seen in Singapore, he had built up a total exposure of 37,800 Nikkei TSE index futures contracts, a position nearly six times larger than that of the next biggest player, Paribas.
At the same time, the main Japanese brokerage houses were substantially short on the Nikkei OSE futures market. Daiwa Securities was 6,899 net short for March contracts, and Nomura was 5,247 net short for March and 2,842 net short for June.
Japanese players correctly guessed the downward path of TSE Nikkei, while Barings' bets were hopelessly wrong.
With reports of the biggest futures positions posted every day by the Osaka Securities Exchange to the financial community, everyone was asking who was behind the Barings trades, one market official said.
"Was it Soros? But Soros wouldn't deal through just one broker. Nor would any sophisticated hedge fund operation. It was the thing traders have been talking about for more than a month in all the bars. No one thought it was own account [of Barings]."Reuse content