Probably not much. Most likely she will also get off lightly due to having a vagina aka the Pussy Pass.
Karen at court
- Thread starter Pekelo
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Probably not much. Most likely she will also get off lightly due to having a vagina aka the Pussy Pass.
Nope. Didn't see anything relating. (Looking only at the document captions/titles)
I'm assuming that the original story of her making around 40 mil from her trading was true since Sossnoff was apparently in a position to see her account in real-time. Otherwise, I doubt he would have so openly gushed by her mere presence.
The gall of it all is that she had no common sense to recognize her original lucky circumstances vs actual skill. In other words, quit while you're ahead. And I'd certainly call a pre-tax gain of 40 mil grounds for taking zero risk going forward, especially for a total nobody with an unremarkable mental capacity.
What was her reply to the Tasty duo about gains? Something like, "no, no, I don't let the market take back from me what it has given." How big of a red scamming flag is that?
The gall of it all is that she had no common sense to recognize her original lucky circumstances vs actual skill. In other words, quit while you're ahead. And I'd certainly call a pre-tax gain of 40 mil grounds for taking zero risk going forward, especially for a total nobody with an unremarkable mental capacity.
What was her reply to the Tasty duo about gains? Something like, "no, no, I don't let the market take back from me what it has given." How big of a red scamming flag is that?
We have to put this into context. When talking about returns, it is always better to mention % instead of absolute numbers. IIRC, once she started to manage tens of millions, her best return was never better than 25%. So although that is still excellent for a HF manager, but it is not incredibly unbelievable. The Yahoo boys were able to do 2-3% monthly.
The really surprising thing about the whole case is this: In the year when she started the funky accounting there was really no reason to do that. Her strategy should have worked just fine, as proven by the Yahoo boys, who made decent profits using very similar strategy in the same time frame.
So what happened? Did she alter the strategy? Did she over leverage? Why change on a winning team as they say in sports? She had been doing well, then suddenly she wasn't, when the market conditions hadn't really changed.
That is the real trading mystery of the case...
Alex, I respect your experience and opinion, but I don't understand. There are two questions here I hope you or someone else will answer for me:
Why would it be illegal for TD/Tastytrade to interview an unsophisticated trader headed for a cliff? Why would Tastytrade even interview her if they could be at risk? As experienced traders, they ought to have understood that her methods were eventually going to backfire. I am just some schmo out here and I am not trading hundreds of millions, but it was obvious to me that she would eventually get hurt.
There must be something I don't know about her method (I thought it was just selling far out of the money, naked options) or about the legal system.
Why would it be illegal for TD/Tastytrade to interview an unsophisticated trader headed for a cliff? Why would Tastytrade even interview her if they could be at risk? As experienced traders, they ought to have understood that her methods were eventually going to backfire. I am just some schmo out here and I am not trading hundreds of millions, but it was obvious to me that she would eventually get hurt.
There must be something I don't know about her method (I thought it was just selling far out of the money, naked options) or about the legal system.
TT interviews were about one thing: make it look interesting and simple, so it drives customers towards TD. So who were they more likely to feature?:
1. Joe Schmo, with a 5K account who trades complicated set ups, or does shit ton of fundamental research...
or
2. Karen, the Grandma, who makes millions and never gives back profits by using a fairly simple OTM premium selling strategy?
I think you know the answer. It is so easy, if a Grandma can do it, so can you! That is why she wasn't asked hard questions...
Yes, no different than the Beardstown ladies who wrote a best selling book back in the 90s on their outsize stock market returns that beat professionals and SPY hands down. Turned out they did worst than buy and hold SPY by a wide margin.
Usually we retails like feel good stories. Frankly I still wish Karen did succeed: That would be the revenge of us mom and pop retail plebeians.
"Alex, I respect your experience and opinion, but I don't understand. There are two questions here I hope you or someone else will answer for me:
Why would it be illegal for TD/Tastytrade to interview an unsophisticated trader headed for a cliff? Why would Tastytrade even interview her if they could be at risk? As experienced traders, they ought to have understood that her methods were eventually going to backfire. I am just some schmo out here and I am not trading hundreds of millions, but it was obvious to me that she would eventually get hurt.
There must be something I don't know about her method (I thought it was just selling far out of the money, naked options) or about the legal system."
The simple answer is a litigious investor would claim it was investment advice and litigate the deepest pocket they could find. I've been named in litigation when a broker in a class I taught was sued on a suitability claim back in my Merrill Lynch days. It's not about legality as much as liability. Easy to find attorneys that will take a case on a contingency just to get a crack at a deep pocket. Doesn't mean they would prevail.
Hopefully Robert Morse will chime in and talk about what he can/can't say before it's considered investment advice.
Why would it be illegal for TD/Tastytrade to interview an unsophisticated trader headed for a cliff? Why would Tastytrade even interview her if they could be at risk? As experienced traders, they ought to have understood that her methods were eventually going to backfire. I am just some schmo out here and I am not trading hundreds of millions, but it was obvious to me that she would eventually get hurt.
There must be something I don't know about her method (I thought it was just selling far out of the money, naked options) or about the legal system."
The simple answer is a litigious investor would claim it was investment advice and litigate the deepest pocket they could find. I've been named in litigation when a broker in a class I taught was sued on a suitability claim back in my Merrill Lynch days. It's not about legality as much as liability. Easy to find attorneys that will take a case on a contingency just to get a crack at a deep pocket. Doesn't mean they would prevail.
Hopefully Robert Morse will chime in and talk about what he can/can't say before it's considered investment advice.
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