Sorry about your loss. When you first signed up with Optionsellers.com, were they already trading naked calls? And were you aware of the huge risks they were taking with your monies? Since, it was mentioned some people had IRAs with them, I am thinking a lot of those investors were not aware of the huge risks Optionsellers.com was taking with their monies.
Optionsellers.com goes bust and the apology video is painful to watch
- Thread starter Sweet Bobby
- Start date
Sorry about your loss. When you first signed up with Optionsellers.com, were they already trading naked calls? And were you aware of the huge risks they were taking with your monies? Since, it was mentioned some people had IRAs with them, I am thinking a lot of those investors were not aware of the huge risks Optionsellers.com was taking with their monies.
Incorrect in that he apparently sold his fund to unassuming investors as a low risk vehicle. If it was assured or even just advertised as described then he will go to prison for sure. He basically managed the fund in a different way than he described to investors.
I highly recommend investors who got burned to not pay a single dime and to first get together and to file a class action law suit. At the very least the investors will get a stay on any demanded payments and things can get sorted out.
I highly recommend investors who got burned to not pay a single dime and to first get together and to file a class action law suit. At the very least the investors will get a stay on any demanded payments and things can get sorted out.
How can your loss be more than what you invested in a hedge/mutual fund?
Not true. He traded money from current IRA accounts. They were set up through Midland IRA (self-directed IRA). He wiped out that balance plus we owe another $35,000. I'm not even sure how this will work out in terms of taxes since we will be paying the balance to FC Stone with after-tax dollars.
He sold this to us as a VERY SAFE investment because he went SO FAR out of the money and so far out in time. In fact, he convinced us it would lessen our risk because it offered further diversification as it was uncorrelated to the market. We were not looking to make "big money" rather seeking greater safety. His book also talks extensively about vertical spreads for risk mitigation. I was also under the impression that the IRA account could not trade naked positions, but it seems he handled both the non-IRA and IRA accounts in the same manner.
We only had our accounts with him since May/June - now they are all gone, plus a significant debit balance in each.
We were assured that the risks were controlled - that was the entire sales pitch. Vertical spreads, ration credit spreads, very far OTM options at very distant dates, as well as other risk control measures. Said we were actually reducing our risk because this strategy allowed us to further diversify (diversify within the commodities markets which were uncorrelated and offer diversification from the stock market). People who trusted him were not looking for huge payoffs - the exact opposite.
We did extensive research on the guy and really couldn't find anything negative. There was a complaint filed several years ago, but they handled it very well and pretty much made the guy whole. We also read about the issue they had with Peregrine exchange that impacted him years ago but he assured us that we would never have that problem with FC Stone, etc.
How do you suggest I go about finding other victims of this debacle? I'd like to form a group so we can discuss how to proceed.
Oh my fuck.
Sorry to hear that.
Sorry for your losses. I had suspicions Optionsellers.com did not tell investors the whole story. Selling naked calls is very risky as a trading strategy and losses to the upside is unlimited! Any options book will tell you that. They certainly, did not do enough to mitigate any possible losses to themselves and their clients, that is for sure!
It wasn't a hedge fund. He had power of attorney to transact in our individual accounts. This was not pooled money.