In my opinion the following list are the best twelve Wall Street movies ever made based on their popularity, entertainment value, and lessons they teach for those paying attention. While these movies may not go too deep into how to make money in trading they do show the dangers of greed, fear, bubbles, and the danger of scams.
The Big Short: This is my all-time favorite trading movie that explains a lot about the 2008 stock market and housing crash. It told the stories of three traders that bet against the housing market bubble and won big. The most famous was Michael Burry and it is interesting to see how close he came to blowing up his fund before his eventual big win after spending two years short mortgage bond market by swapping Collateralized Debt Obligations (CDOs)
Wall Street: A tale of 1980s Wall Street insider trading and the darker side of capitalism and stock market manipulation. In this movie you see the rare event where a corporate raider and inside trader get arrested for securities fraud.
Wall Street: Money Never Sleeps: This is an updated and modern version of Wall Street, and tells the continuing story of the original movie and the comeback of Gordon Gekko as Wall Street players never retire.
Trading Places: The classic comedy where commodity traders try to turn a street hustler into a trader and shows the old 1980s live trading pits. Very loosely based on the Richard Dennis Turtle traders real life story. After seeing “Trading Places”, market wizards Richard Dennis and William Eckhardt, decided to reenact the new trader experiment. Dennis took out an ad in the newspaper to find traders he thought had the right skills to be profitable in the futures market. (The Turtle Traders)
Margin Call: I really enjoyed this drama about traders inside an investment bank at the beginning of the 2008 financial meltdown. I wish this movie was longer. This is a type of a behind the scenes look at what crashed the stock market, over leveraged derivative bets with no risk management.
Floored: This movie did a good job of showing how the trading life can turn your life upside down, or for some people, it can make you fabulously wealthy. This is a game played by professionals with both big winners and big losers.
Boiler Room: This movie is about how a boiler room operation works by hawking non-existent stocks and bonds for non-existent companies to enrich the ‘brokers’ peddling these worthless stocks. A great lesson is not being scammed by something contacting you with a great opportunity, this is not how the stock market works.
The Wolf of Wall Street: This is at times a raunchy story of greed based on the writings of Jordan Belfort, a stockbroker in penny stocks convicted of market manipulation. This movie may contain more drugs, sex, nudity, and cursing than you see in the other stock market movies, but it’s ultimately a comedy and a cautionary tale. This movie works as pure entertainment and is not to be taken seriously. Also, beware of the pink sheet OTC penny stocks, many are scams and/or pump and dumps.
Rogue Trader: The story of Nick Leeson, an ambitious investment broker who single handedly bankrupted Barings Bank one of the oldest and most important banks in Britain. This is one of the biggest risk of ruin lessons in the history of trading and shows the extreme danger of getting on the wrong side of a bull market short with uncapped risk, the losses can be exponential if not closed.
Too Big to Fail: It chronicles the financial meltdown of 2008 and centers on Treasury Secretary Henry Paulson. This documentary shows the step by step crash and bailout of the financial sector in 2008 and how it all played out.
Barbarians at the Gates: This movie centered on the leveraged buyout of RJR Nabisco. Audiences will be shocked at the ego and greed of Nabisco’s CEO F. Ross Johnson and the behind-the-scenes negotiations around this famous leveraged buyout offer. This movie shows how a stock price can go parabolic as a buy out battle between two parties escalate until the last minute.
The Wizard of Lies: A movie about the fall of the Bernie Madoff Ponzi scheme that robbed $65 billion from its remaining investors that were unable to get out in time. The story of the largest fraud in the history of the U.S. that was only discovered during the 2008 crises as even Madoff’s investors needed their money back. The biggest lesson is that real stock market returns are not as steady in the real world as his pretended to be. Madoff was able to raise billions in capital and keep his investors happy by returning an average of +1% a month consistently and little more than +12% a year with no losses or drawdowns in capital. The accounts compounded exponentially but were not real and only recorded on paper. Many real traders knew that he was a fake in real time before he was discovered as the consistency of those returns are impossible in the markets and could not be reverse engineered as it would be the holy grail of trading. The volume of trading on the exchanges did not match up to the Madoff investment statements to his investors and no major investment firm knew of him making trades. Madoff Securities LLC was investigated eight times over 16 years by the U.S. Securities and Exchange Commission (SEC) along with other regulatory authorities.