Martin Schwartz talks about losing $25m Feb 2018

[RedDuke]

41,000 options. Unbelievable. I suppose it was a spread rather than a directional trade. What I don't understand is why he uses options and not futures.

Any ideas?
thanks

Because it is very easy to collect premium while they time decay, the key is to manage what happens when the shit hits the fan.

 

[Laissez Faire]

I could never believe he actually made millions trading off moving average channel bands. Always thought he must have been one of those traders with an intuitive feel for the market who doesn't understand how and why he makes money..

In his autobiography, he pretty much said he was losing money for 10 years until he got his act together. I'm sure it was a bit more than just moving averages in play.

 

[guru]

41,000 options.

Was it 41,000 or 14,000? The initial post says 14,000.

I suppose it was a spread rather than a directional trade.

It may not matter since if he sold naked calls then he might've been partially hedged using something else. But it's also possible they were just naked calls.

What I don't understand is why he uses options and not futures.

Because it's a popular and powerful strategy to sell weekly UVXY calls, when it works.
I don't know anyone converting this strategy to trading futures, which could be complex because UVXY is already based on rolling VIX futures. So UVXY does the rolling of VIX futures for you and its purpose is to make this easier and not need to trade futures. But I guess there are plenty of other futures-based strategies. If he used futures then someone else would've asked why he didn't short UVXY calls like many other people do. It's the simplest thing you can do. Again, when it works...

 

[RedDuke]

In his autobiography, he pretty much said he was losing money for 10 years until he got his act together. I'm sure it was a bit more than just moving averages in play.

he made his money of insider info. If you read PitBull he camouflaged it there, but it was pretty obvious, when he was describing "inside skinny" or what ever he was called. Been a while since I read the book.

 

[Laissez Faire]

he made his money of insider info. If you read PitBull he camouflaged it there, but it was pretty obvious, when he was describing "inside skinny" or what ever he was called. Been a while since I read the book.

Is that confirmed? I recall at least one other saying the same thing. I don't recall Inside Skinny. It's been a while...

I thought he made most of his money day trading the pit traded S&P futures.

 

[RedDuke]

Is that confirmed? I recall at least one other saying the same thing. I don't recall Inside Skinny. It's been a while...

I thought he made most of his money day trading the pit traded S&P futures.

Futures came later, initial capital was made trading stocks on Amex based on "tips".

 

[Laissez Faire]

Futures came later, initial capital was made trading stocks on Amex based on "tips".

Aha. Well, that's news to me.

I do remember mentions of Amex though. Options, I think?

 

[Overnight]

Aha. Well, that's news to me.

I do remember mentions of Amex though. Options, I think?

American Stock Exchange.

 

[Laissez Faire]

I seem to recall some newer interview with Marty where he commented that he probably would not be able to make money in today's markets, i.e., index futures, like he did back in the day. But don't take my word for it. Just something I seem to recall.

Always liked the guy from both his own book and in Market Wizards.

 

[RedDuke]

I seem to recall some newer interview with Marty where he commented that he probably would not be able to make money in today's markets, i.e., index futures, like he did back in the day. But don't take my word for it. Just something I seem to recall.

Always liked the guy from both his own book and in Market Wizards.

correct. Heard that too. He also covers it in his book, he found a pattern they worked for a while and then stopped.