Why Is He a Stock Genius?

It's more to do with him rarely being wrong when it came to picking what to buy. His track record was so good that everyone followed his lead. The guy he ended up getting fired listened to him when he told him that he should buy this one stock short, even though he wasn't so sure about it, he still did it. The thing was though that Crowe'a character already knew what was going to happen when he did that. that's what makes him a genius.

He doesn't trade equities, but bonds, or debt (or gilts, as they are referred to in the UK). He sells the market short from 115.50 (that means a 115.5% yield, or 'coupon', after 10 years), thus causing the market to crash, because all other parties jump on his bandwagon, and then buys them back at a much lower price, thus 'squaring' his position. 115.5-112.5 * 5,000,000,000 (5 billion, known as 5 'yards') = a profit of £150 MIO, but the average prices are diverse, hence his actual profit of £70 MIO. Because his position is now square, he can settle them flat the following day and has no liability to the market. His only cost, overnight, is the initial margin he pays on his open position, and that is returned to him (without interest) the following day. Holding his nerve is what makes him a genius, along with realizing (through time-consuming and careful analysis) that the market is over-cooked. It's called day-trading, and it's completely legal. The crucial difference between the debt market and the stock market is that if you sell stocks short, you have to borrow them (at cost) from somebody who already owns them, to present them to the market. The gilt market (they use the term 'bond' in the film for people who've no experience) doesn't work like this because you're essentially trading forward debt, which doesn't become concrete (although the p/l is real) until expiration... Some 10 years hence... ...

I've seen things you people wouldn't believe...