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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...... https://www.nytimes.com/1985/12/27/business/a-crucial-time-for-the-comex.html

One of the most misleading statements about options that has been perpetuated forever is " 90+% of all options (or whatever high number is used) expire worthless" This is like saying "100% of all humans die". What the statement fails to point out is what happened during the lifetime of the option. An option may have been "born", or "come on the board" at $3.00. Then during it's lifetime, it might have "travelled" to $12.00, then $5.00, then .50, $27.00, $.10, $5.50...and then expire worthless. You get the point. All humans die but, what is important is what happened during their lifetime!

So he lost $868,000 on the short calls but at least he made $8000 on the short puts!

Another interesting story from an individual retail trader in 2014, also in Natural Gas..... Same story, but some learning on this guys pert... https://www.drwealth.com/how-i-blew-up-105000-in-my-trading-account/

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.

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.