Question: I don't fully understand how Le Chiffre lost all his money when the bomb failed to blow up the prototype aircraft at Miami airport. If the bomb had exploded, the shares in the airliner would have crumbled, but because it didn't, wouldn't think mean that Le Chiffre missed out on the opportunity to make a load of money, but would still be left with the money he had in the first place?
sdaniels7114
4th Jan 2007
Casino Royale (2006)
Answer: Lachiffre had bought Puts on the Airline stock which have a definite drop dead date, expiration date, usually the 3rd Friday of any month. So the bomb is a dud, the Airline rollout is a success, stock goes up, puts expire worthless.
Answer: Its not realistic IMO, but a successful roll-out of the new airliner would have led to an increase in the stock's price which would have cost anyone shorting it. Just not 100% of their investment.
Shorting stocks can cost an investor more than 100% of their investment. For example if you borrowed 1 stock for $50 hoping the stocks drop to $20, you make $30. But it the stocks jump to $150, you lose $100 (twice your investment).
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Answer: Le Chiffre was essentially betting that airline stock would fall, so he bought futures contracts assuming the price would fall, when the bomb did not go off, airline stock did not fall, so he lost his money, as the contract he'd bought still had to be fulfilled.
pross79