Florida Man Who Raised $100 Million To Short The VIX Likely Returning To Old Job At Target

[tomorton]

........So the long EURCHF was the right choice as the downside was limited.........

Until you looked at the chart.

 

[Martinghoul]

I don't know the history of Wall Street but I heard somewhere that in the past, the share holders were in fact personally liable for company debts. So if the company messed up big time and owed money, share holders had to cover it. Nowadays this may sound like a ridiculous idea to most (thanks to Wall Street) but in fact it makes all the sense. If, as a stock holder, you participated on the upside, then, should that upside be in fact due to participating in stupid (often herd like mentality) actions (think 06-08), you should participate on the downside too. But that would kill the idea of pure stock speculation and bring it back to the very idea of what the stock market was created for (bring funds to companies and allow the stock owners to participate in company profits).

Shareholders do cover company messes. In fact, shareholder's equity is the first thing that normally gets wiped out in an insolvency.

 

[Cabin111]

I would have imagined that guys who "sell vol for a living" ought to lurk around doing nothing much, until one of the black swans eventually hits accompanied with a huge VIX spike, like Monday, and then back up the truck to short it once you get a feel for where things are.

Why would someone constantly short VIX long term on a daily basis, to short every minor pop, in record low volatility regime that everyone has been saying for months and months is a record breaking statistical anomaly in calmness?

I suppose the returns will suck just waiting around and real wealth be destroyed by inflation. I suppose it will feel like you're not making progress for ages, on a day to day basis. But that's how this line of work should be right?

Kinda like how actors make a living. They don't get a monthly salary. They do a hit movie and get paid millions in a lump sum. Then they live off that, and until their next gig comes along, get paid lump sum again. Short vol guys should be like that right? Make no money for ages, then bet the farm when the situation is right and earn a lump sum to live on. Rinse repeat. And maybe to play both sides. Maybe long volatility when historically low vol then flip to short it when it spikes.

 

[Cabin111]

I have done 2 puts in my 17 years of trading options...2 One was to buy back a stock. The other was the "dot com bubble". I did my put on that one...I knew there was no real value behind so many of the tech companies. I just knew it...No earnings at all...No chance of earnings!! Well I was right about that...Just wrong about the timing. The dot com crash happened 6 months after my put expired. I was great at knowledge but bad on timing!! That soured me on puts. I'm just a boring and safe covered call guy...

 

[i960]

I disagree. Everyone knows that you don't bet against Central Banks as they have unlimited (or so they say) buying (or should I say "printing") capabilities. So the long EURCHF was the right choice as the downside was limited. At least until SNB pulled the plug, against what they claimed before. Therefore I don't see how these compare

Long EURCHF was not the right choice nor was the downside actually limited just because the SNB attempts to peg it (in fact, the events subsequent to that clearly prove that the downside was indeed not limited). The right play here was to not trade this pair at all. Don't get involved with hard pegged currencies because they're a dislocation just waiting to happen.

I do agree from a literal standpoint they're not the same but from a "the status quo and/or trend should continue forever" standpoint they're similar. They both rely on "this should always happen" and when that type of trade is long in tooth it's a bad trade.

 

[Kim Klaiman]

The only way for Seth M. Golden to make those returns was to use excessive leverage. And when you use excessive leverage on a product which is very risky to begin with, the end is well known. Nobody should be surprised.

 

[1a2b3cppp]

The roll would mean you would consistently lose money

GAT

Even adding to unprofitable positions?

 

[ironchef]

The only way for Seth M. Golden to make those returns was to use excessive leverage. And when you use excessive leverage on a product which is very risky to begin with, the end is well known. Nobody should be surprised.

But this is what he said on Twitter

Seth Golden@SethCL

$VIX $UVXY $TVIX $VXX good morning my fellow tweeters, sorry to say to all the haters, “I’m still alive and kicking”!

5:31 AM - Feb 6, 2018

 

[punisher]

Shareholders do cover company messes. In fact, shareholder's equity is the first thing that normally gets wiped out in an insolvency.

Are we talking about the same thing? I was talking about the fact (again, from what I heard somewhere) that in the past shareholders would be liable with their own (read: personal) assets for any insolvency, so to protect from the stupidity. It's like if you're an owner (as shareholders are) then you are liable, not up to the share price, but all the way down. It does make sense if you are looking for the fair and capitalistic markets. It doesn't make sense if you're looking to game the system and abuse it (like it is now).

Think along the recent stories about the bankruptcy of that PA refinery. If that fund (shareholder) were to be liable (like the shareholders were in the past) with their own funds then draining that refinery out of funds (leading to its bankruptcy) wouldn't happen in the first place. Never mind Ted Cruz (or other politicians) using that bankruptcy to lobby against corn based ethanol...

 

[Martinghoul]

Are we talking about the same thing? I was talking about the fact (again, from what I heard somewhere) that in the past shareholders would be liable with their own (read: personal) assets for any insolvency, so to protect from the stupidity. It's like if you're an owner (as shareholders are) then you are liable, not up to the share price, but all the way down. It does make sense if you are looking for the fair and capitalistic markets. It doesn't make sense if you're looking to game the system and abuse it (like it is now).

Think along the recent stories about the bankruptcy of that PA refinery. If that fund (shareholder) were to be liable (like the shareholders were in the past) with their own funds then draining that refinery out of funds (leading to its bankruptcy) wouldn't happen in the first place. Never mind Ted Cruz (or other politicians) using that bankruptcy to lobby against corn based ethanol...

I really have a hard time imagining a case where ordinary shareholders can be personally liable for any wrongdoing, beyond their equity being wiped out. Indeed, would it seem fair to you if a pensioner with a passive small stake in a company had to be responsible for something over which they never have any control? Maybe the logic of personal liability can be applied to directors, but even that's not an obvious argument.