Quick thought: When rogue traders are found out, they get sacked by their employers, even arrested by the authorities. They have broken the rules, betting the house and losing vast amounts of money. We read about these people every few years. Kerviel is the latest.
But there is more to this story. If markets are broadly random, then for every spectacular blow up, there is a rogue trader who has got lucky and made a fortune for himself, his team, and his employer. Why don’t we read about these traders; they are equally guilty of betting the house and should be punished for their crimes. But no, these ‘bad’ good trades are never made public. I wonder why.