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  3. G20 trades on China or QQQ?

    @Crazy ayzogreat results, thanks for posting!
  4. G20 trades on China or QQQ?

    @Kim Closed my 3rd BABA trade. $1,676 profit on $9,420 bet = $17.8% profit in 5 days. The call leg is still open, counting it as worthless in the calculation. Still a change of a bounce to further increase the profit.
  5. G20 trades on China or QQQ?

    Opened a 3rd JD Trade
  6. G20 trades on China or QQQ?

    @Kim Closed my second JD G20 Trade. 73% Profit on a 4 day trade!! $6,451 profit on $8,772 bet. I'm starting to like politics. ** This is the closing trade of the narrow strangle above. The call leg is still open, but counting it as worthless for the calculation. Still an outside chance of a bounce to further increase the profit.
  7. Look up amaranth advisors. Also a victim of nat gas.
  8. Why do options writer have better chance of earning

    I shouldn't be laughing, but that's pretty funny.
  9. Last week
  10. So he lost $868,000 on the short calls but at least he made $8000 on the short puts!
  11. Somebody from OptionSeller clients shared his statement for 1mln portfolio (you can even find a small number of April calls - absolutely useless). Looks like a horror movie -
  12. Another interesting story from an individual retail trader in 2014, also in Natural Gas..... Same story, but some learning on this guys pert...
  13. There were several other major catastrophes of the same kind, on the Comex, in Gold and silver during the 1984/85 period. I was a comex member at that time, and clearly remember the cases being mentioned from this NY Times article of that period. Basically, after the massive long term bull market in Gold and silver during the late 70's, ending with an explosive short rally blowoff top in 1981, the precious metals went into a decades long bear market. Options on futures only began trading on the exchange in 1983, so this was all new, and novel stuff to the futures traders. The "Westheimer Affair" was as notable as some of the others you mentioned. Basically they just sold the "exchange limit" of 4000 calls (per seat) every month, and the market continually went down just perfectly, allowing these new options traders to amass some $50 million in just 2 short years. They even got so greedy that they went out and bought 3 more seats for brother's in law, and cousins, so that they could sell 4000 calls for each membership. It worked perfectly for about 2 years, until the inevitable 1 week explosion in gold from something like $250 to $500 in just a few days, causing the same situation as option sellers. Except these were exchange members , with member margin requirements, which were basically nothing. So they lost their $50 million and owed the clearing house almost as much.... As the story goes...they were located by the feds, at JFK airport with suitcases full of cash trying to make a clean escape from the country.... Here is the article from that time......
  14. I have his books, never got into commodities though

    What has me concerned is that there is great opportunity to be had with the SPAN margin system that is used for futures/futures options. Yes, it does allow for one to have much greater leverage, and take on more risk than in stocks/stock options. But, these guy's behavior, I believe, is not the norm, it is the exception, and it worked for them as long as the statistics allowed it to go on. Probably even longer. They obviously know enough about how all of this works, and that after selling naked deep OTM strangles, with no offsetting protection, and have not gotten blown up, they should have considered themselves lucky, and counted their blessings, and maybe even pulled back a bit. But, just when the statistics were not on their side, they went out and took the highest level of unprotected risk that the , very liberal, SPAN margin would allow, and the inevitable happened. I am worried that this incident might ruin it for all of us, and all of the responsible , "defined risk" traders, who really benefit from the SPAN margins, and use it wisely. I'm concerned that this incident might cause the regulators to start making changes, and cracking down on SPAN rules.
  17. Hello all, I am more than beginning in here... So I was thinking about getting the help of an advisor... Still I wanted before to get advice about this : is it a good way to proceed ? And I took some look at the Bahamas SIA Registrant... but... the list of september 2018 is blocked by my computer( Should I use an older one ( or there is no chance the 2018 one is corrupted ? Sorry if stupid...
  18. Your'e right about the one move alone in Natural Gas. But, it was the combination of 2 , usually correlated commodities, having extreme outsized moves in opposite directions, and they were on the wrong side of both in the most irresponsible way possible....naked short puts in crude, and short calls in gas....with absolutely no risk management controls in place..... IV is irrelevant as they sold these , at the time , probably 10 std dev OTM options for pennies in mass quantities, and their risk management plan was to just rely on something like this not being possible..... Also, there was no "gap" risk as these markets are open 23 hours a day, and extremely liquid. They had many many chances to get out
  19. agree. But people see these crazy returns and think these personalities are doing something magical when really most are just levered to the hilt and taking dumb risk when there are several reasonable ways to hedge
  20. Niederhoffer, Karen Supertrader, LJM fund.. there are probably many others less famous. Naked options by themselves are not necessarily a bad thing. The problem is leverage and position sizing. If implemented correctly, naked options can probably make money in the long term. But if you overleverage, you just cannot recover from the inevitable occasional losses.
  21. yep beat me to it...same story with neiderhoffer. edit: there are two Neiderhoffer's, referring to victor and his famous blowup(s)

    Why do options writer have better chance of earning
  23. One word: LEVERAGE. If you read James Cordier's Seeking Alpha article Option Selling Opportunities So Good They're Scary, he explains how little margin you need to put those positions. So he applies an extreme margin to already leveraged instrument, without any hedging, and then is surprised he is wiped out. The article title implies that those strategies are almost free money. And then there is no mentioning of risks at all. ZERO. Anyone who was reading the article could see this coming. The writing was on the wall. So no, I don't feel sorry for him at all. And I don't feel sorry for his clients - they could see find all the lawsuits against him with simple Google search.
  24. Hm, haven't read the story but if this is really the case, I find it hard to understand how you can position yourself in such a way, that a move like this in NG can have such devastating consequences. If you set it a bit into perspective it should never have caught them so much by surprise. This is NG since 1990 (nearest futures contract, just plugged together one after the other) Since this story obviously started a bit more than month ago, here are the monthly returns (to be fair futures contracts this time ratio-backadjusted): The latest move is remarkable. However, it is anything but unprecedented. I think 'Black Swan' is a bit of an exaggeration here (in the sense of 'rare events that are beyond the realm of normal expectations in history'). It is always easy to point with fingers in hindsight. But that almost seems like they wanted to be blown up. Anyway, with an option's delta being (roughly) the probability to end in the money, selling a delta of 0.05, would you not expect that about every 20th trade will not play out in your favour?

    Not sure if you folks saw this over the weekend. I feel sorry for this guy - I know how it feels to blow up. This guy lost 500M+ by some accounts.
  26. Yes, I am very interested in how the whole legal claims process will play out. It may serve to be a landmark case of sorts. In his tearful video to the clients, just about everything he says is a lie. I can't go through the list as it is just way too long. But, the first lie is to keep referring to his "operation"(?) as a "hedge fund". In no way is it any form of hedge fund. It is a "faux" money manager who has convinced some 290 people to sign over power of attorney to manage "individual" accounts. There is no "fund" here. If there were, then at worst, everyone would have lost 100% of what they invested, and no be responsible for any further margin calls which they all are now, because it is in everyone's "individual" names. So, he has no liability, as of yet (let's see how creative the lawyers turn out to be), and the customer, as the account is in "their" name only, has 100% full liability for everything that has been done in their name. He cites the Wall Street Journal article of a few days ago which highlighted these recent black swan moves in crude and gas, and lies by saying that so many other "hedge funds" lost everything, and their livelihoods as well. He is in no way a hedge fund, and any "real" hedge funds that deal in energy products are probably operating in a sophisticated manner, with a full staff of "quants" creating "real" hedges, so maybe those funds are down for the month, maybe they even caught the other side of this as they saw it coming, who knows. But, the only way to land where this guy did was to do exactly what he did, which is to just sell naked options with ZERO form of hedges in place, and no plan for risk control. He simply rolled the dice with other peoples money, and after having the statistical odds play out in his favor , as they tend to do for quite awhile, rather than be happy, and consider himself very lucky to have not blown up after 5-6 years, he did what kills everyone in this manner...he got greedy. He just sold far, far OTM puts and calls for pennies, and the inevitable happened. He should have know what the statistics were and that his time was running out. I don't believe that anything , to this degree, has happened to any "legitimate" energy fund during the past weeks.. The fact that he still has offices, and staff to answer the phones,and has to pay all of those expenses with whatever money his firm still has, means that there are assets that can be gone after by the "class action" law firm who , I'm sure, will know how to navigate this very well. I'm interested to see if any culpability is going to be found on the part of the clearing house (FC Stone) for being a "knowing" contributor, and looking the other way while client's IRA"s were trading in a manner which is not legal to do. I REALLY hope this does not wind up with some regulatory fallout which could affect, and alter, the SPAN margin rules and ruin it for everyone. Just like most people here, as an absolute rule, I never have positions with open ended risk. I don't even like to do ratio's. I haven't seen anything in many years that reminds me, as much as this episode has, that even though these things almost never happen...tomorrow it could.
  27. Very interesting - good catch. Several questions - the current situation is not the worst thing which may happen. In 2013/2014 NG had higher volatility, but they survived somehow OR oil in 2014/2015. And another point - how law company/attorneys (in case of Cordier its ChapmanAlbin) starts the claim process? Is it their initiative or it should be some request from optionsellers' investors?
  28. After reading the first post here about this story I became extremely interested in the whole thing. The story hit on Friday, Nov 16, and as of Saturday night (the 17th) I could not find one single piece of info about it anywhere on google, even under "google news". I typed in every possible combination of words I could think of to return something...But nothing , anywhere. That was even more strange than the actual story. Eventually , I found a thread on Reddit with a long discussion about it. Without going into all of the fine details, the basics of what happened were that they placed 2 major bets. 1- short 100% naked puts in crude oil 2- short 100% naked calls in Natural Gas. The term "Black Swan" gets thrown around a lot but, this definitely qualifies for that title....especially the 2 trades combined, as crude and natural gas have some degree of correlation and tend to move together. Needless to say, the was ZERO money management or any form of risk control. Their sob story about the markets moving too fast to make it possible to exit the trades has no merit as both of these markets, and the options, are open , and fully liquid, 23 hours a day. So there wasn't any "gap risk" as would be the case in stock options. Just to give some perspective as to how large the "once per 25 year" move was, I attached a chart of crude and natural gas to this post,so you could have some idea. There were many opportunities for them to have taken their losses, and gotten out , along the way. But, they ultimately lost 100% of every account's money, PLUS the accounts are now in the hole for an almost equal amount that they have to come up with. The clearing house is Int'l FC Stone, a very large clearing house. I think they should have some responsibility in all of this as they very well knew what was going for years. These guys were just selling .05 delta strangles, in various commodities, for many years. IV has nothing to do with any of is a 100% "gamma" situation. We all know what the statistics are on selling .05 delta strangles over time. It worked for many years, and the "black swan" eventually reared it's head and this is what happened. I have seen this before, and I do believe that markets tend to have these kinds of occurances when certain market participants are too heavily weighted in one place. The market "knows" about this and eventually blows those positions out of the water. So, naked short puts on crude, and naked short calls on Natural gas, and this is what it looks like. Here is the Reddit thread I initially located...
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