Neiderhoffer
- Thread starter timvodas
- Start date
The 1000/1100 vertical is 2.00 offered. $7.5MM credit at 15k units. Again, it's a proxy for the exotic NT bet, but much less attractive. Moot, but a touch-bet at the SPX 1300-strike would have required but 30% of the credit received on his Mar1000P. The marked-gains on the touch-purchase would have resulted in a gain roughly equal to the marked-loss on the naked puts. Hindsight, but an effective hedge.
From my understanding Vic's supposed downfall was more of a liquidity issue than a risk issue. We all are aware that the so called credit crunch locked up a hell of a lot of credit markets. And when you're on huge margin in derivative products, and suddenly liquidity dries up, you're a little more then screwed.
Surf pointed out that the rules of the game may very well have changed. This would be completely consistent with the panic in the debt market. Premature margin calls and lack of consistent pricing could very well have been enough to turn a pullback into a collapse???
Surf or other - do you really think Vic is going to clarify what happened? From what I have read, he went into a deep depression after his losses from the Asian crisis, I'd be a little surprised if he just comes out and confirms anything. He'll be trying to save face and be as vague as possible. I do think the New Yorker is reputable enough to report factual info - and if it concludes the article saying he's trading his own account now, and only his own account - I am likely to believe that.
Surf pointed out that the rules of the game may very well have changed. This would be completely consistent with the panic in the debt market. Premature margin calls and lack of consistent pricing could very well have been enough to turn a pullback into a collapse???
Surf or other - do you really think Vic is going to clarify what happened? From what I have read, he went into a deep depression after his losses from the Asian crisis, I'd be a little surprised if he just comes out and confirms anything. He'll be trying to save face and be as vague as possible. I do think the New Yorker is reputable enough to report factual info - and if it concludes the article saying he's trading his own account now, and only his own account - I am likely to believe that.
Here is an analogy. Dallas scored 9 points in the last 45 seconds of the game to beat the Buffalo Bills 25-24 on Monday Night Football. Now Tony Romo for Dallas threw 5 interceptions, 2 ran back for touchdowns, and a fumble for 6 turnovers. Buffalo ran back a kickoff for a touchdown.
But Dallas was still able to move down the field and score with little time left, and then after missing the 2-point conversion to tie it, then kick and recover an onside kick, whihc is not easy at all.
Then Dallas' field goal kicker had to hit a 57-yarder field goal to win it, not ONCE, but TWICE as the Bills called a time out just before the first kick went off. Both kicks went dead center just over the uprights.
So the details of the game make it hard to believe Dallas was able to win a game after giving up 6 turnovers, 2 for TDs, and a kickoff return, and after playing a shitty first half and being forced to kick an improbable 57 yarder which would be missed I would say 5 out of 6 times, despite the fact the kicker hit it TWICE.
But in the books it says 25-24...
DO you think the Bills give a rats ass @#$% about the details like it justifies the loss somehow? No @#$%ing way.
Neiderhoffer blew up, who gives a @#$% if it was credit crunch, over leverage, naked puts, fat wife, missed field goals... He lost millions... AGAIN and that is all there is too it. Tuesday morning in Buffalo no one gave a @#$% over the reasons and the ivnestors in Matador are not gonna get a reason to make them say "Ok I do not mind losing millions cause it was because the CME raised margins in a market crash"
What's my point? Coulda Woulda Shoulda... meaningless. He had piss poor risk management because nothing happened this year that was so outside the realm of possibilities. These guys are not pedestal traders, they @#$% up a good thing as good as the rest of us
But Dallas was still able to move down the field and score with little time left, and then after missing the 2-point conversion to tie it, then kick and recover an onside kick, whihc is not easy at all.
Then Dallas' field goal kicker had to hit a 57-yarder field goal to win it, not ONCE, but TWICE as the Bills called a time out just before the first kick went off. Both kicks went dead center just over the uprights.
So the details of the game make it hard to believe Dallas was able to win a game after giving up 6 turnovers, 2 for TDs, and a kickoff return, and after playing a shitty first half and being forced to kick an improbable 57 yarder which would be missed I would say 5 out of 6 times, despite the fact the kicker hit it TWICE.
But in the books it says 25-24...
DO you think the Bills give a rats ass @#$% about the details like it justifies the loss somehow? No @#$%ing way.
Neiderhoffer blew up, who gives a @#$% if it was credit crunch, over leverage, naked puts, fat wife, missed field goals... He lost millions... AGAIN and that is all there is too it. Tuesday morning in Buffalo no one gave a @#$% over the reasons and the ivnestors in Matador are not gonna get a reason to make them say "Ok I do not mind losing millions cause it was because the CME raised margins in a market crash"
What's my point? Coulda Woulda Shoulda... meaningless. He had piss poor risk management because nothing happened this year that was so outside the realm of possibilities. These guys are not pedestal traders, they @#$% up a good thing as good as the rest of us
Coach, being a Bills fan that analogy really hits home.
What I find so surprising about Neiderhoffer blowing up twice is how much effort he makes in trying to learn from other disciplines. Yet he didn't really learn from his own personal mistake during his first blow up. It makes no sense how anyone with even a reasonable amount of intelligence could risk his entire account and a large percent of his personal net worth so easily. To take that sort of risk even once, even if you win, seems incomprehensible.
I've heard people say that the cycle Jesse Livermore went through of making a ton and then losing it all, and then charging back and redoing the whole process again and again was part of his psychological makeup that motivated him. I doubt that Neiderhoffer's problem is lack of understanding of options theory or exotic positions. Some people just like to walk on the edge.
What I find so surprising about Neiderhoffer blowing up twice is how much effort he makes in trying to learn from other disciplines. Yet he didn't really learn from his own personal mistake during his first blow up. It makes no sense how anyone with even a reasonable amount of intelligence could risk his entire account and a large percent of his personal net worth so easily. To take that sort of risk even once, even if you win, seems incomprehensible.
I've heard people say that the cycle Jesse Livermore went through of making a ton and then losing it all, and then charging back and redoing the whole process again and again was part of his psychological makeup that motivated him. I doubt that Neiderhoffer's problem is lack of understanding of options theory or exotic positions. Some people just like to walk on the edge.
How many of his investors placed money into his care believing that, "well he has blown up once; lightening will not strike in the same place twice"?
Now that lightening did strike twice in the same place, will he convince anyone that he is not a 'lightening rod' and his chance of blowing out a 3rd time is extremely high?