Any thoughts on this article?

"All those dollar, and fifty-cent, options that Empirica has accumulated—few of which will ever be exercised—soon begin to add up. By looking at a particular column on the computer screens showing Empirica’s positions, anyone at the .rm can tell you precisely how much money Empirica has lost or made so far that day. At 11:30 A.M., for instance, they had recovered just twenty-eight per cent of the money they had spent that day on options. By 12:30, they had recovered forty per cent, meaning that the day was not yet half over and Empirica was already in the red to the tune of several hundred thousand dollars.The day before that, it had made back eighty five per cent of its money; the day before that, eightyfour per cent; the day before that, sixty five per cent; and the day before that also sixty five per cent..."


Maybe I'm missing something but does anyone here understand how they are recovering so much of the option premiums on a daily basis?
 
In the markets the so called "rare" events happen a lot more often than in real life. The probability distribution has "fat tails" which means that it really isn't a true normal distribution as in real life. Pretending that rare events can't happen is just living in denial. I have respect for people like niederhoffer , but the fact of the matter is that he became overconfident and screwed up. Saying it was just "bad luck" doesn't help his investors.
 
Originally posted by dotslashfuture
In the markets the so called "rare" events happen a lot more often than in real life. The probability distribution has "fat tails" which means that it really isn't a true normal distribution as in real life. Pretending that rare events can't happen is just living in denial. I have respect for people like niederhoffer , but the fact of the matter is that he became overconfident and screwed up. Saying it was just "bad luck" doesn't help his investors.
More...

just because the article implied that he pretends that rare events can't happen, doesn't mean that he does. the slant in the article was obvious.

incidentally, are you hedged against all contingencies right this instant?
 
Originally posted by chasinfla


incidentally, are you hedged against all contingencies right this instant?
More...

While I cant say that I am COMPLETELY hedged against all contingencies I can say this;

In order to blow up this account that I am currently trading the NQ with, there would have to be a 1,000 pt pop in the opposite direction to blow up this account or 10 times the size of the September 17th open! AND this would have to all occur intraday with me somehow being stuck in the position...

Even if the market somehow managed to do this to me, I could still re-fund the account twice with cash...

This guy had 8 figures maybe more and risked it all at once, 2 times...

If that is what a trade does at "the top" as you say then I will take my seat in the bottom!
 
Originally posted by Commisso


While I cant say that I am COMPLETELY hedged against all contingencies I can say this;

In order to blow up this account that I am currently trading the NQ with, there would have to be a 1,000 pt pop in the opposite direction to blow up this account or 10 times the size of the September 17th open! AND this would have to all occur intraday with me somehow being stuck in the position...

Even if the market somehow managed to do this to me, I could still re-fund the account twice with cash...

This guy had 8 figures maybe more and risked it all at once, 2 times...

If that is what a trade does at "the top" as you say then I will take my seat in the bottom!
More...



well, I think i can sum it all up by saying noone would really know unless he's been there.
 
Commissio,

I would have to agree. For someone to make it to a degree that Neiderhoffer had (mansion, art, connections, etc.) and then to not protect it shows that he didn't belong there in the first place.
 
You must log in or register to reply here.
Back
Top