Optionsellers.com goes bust and the apology video is painful to watch

Pardon my ignorance. I don't trade natural gas. I am wondering why was it so difficult to get out of this trade.

My understanding about futures is that there are different contracts for different months. Suppose the NG contract for X month expiry goes limit up, why can't the trader hedge his losses using NG contracts for Y month expiry? How did optionsellers.com get caught so badly?
 
Really hard to watch that video. They say that the lessons that one pays the most to learn are the lessons that they learn the best. I hope he's able to find another good opportunity.
 
ET180 said:
Really hard to watch that video. They say that the lessons that one pays the most to learn are the lessons that they learn the best. I hope he's able to find another good opportunity.
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It is hard to watch but he not only lost EVERYTHING in his investors’ accounts, but these investors now also owe thousands, even tens of thousands or more to FC Stone. He marketed his product as safe due to diversification and strict risk management. He made fun of people who said risk was unlimited because those people just didn’t know how to manage it. His fees were exorbitant for this “expertise.”

Many people also invested IRA money which is now less than zero. Aren’t there special rules when dealing with IRA’s? How do they even bring those accounts back to zero - with after tax dollars? Can those losses be tax deductible?

People who invested with him were not looking for massive returns, rather for diversification. That was his whole sales pitch - he aims for singles and never even swings for triples or home runs. Talk about a massive, massive failure. The losses he caused are likely in the 100s of millions.
 
Sweet Bobby said:
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OMG!!! This guy should be on suicide watch. It looks like he hasn't slept and has been crying for like hours and this video looks like his suicide note to all of his clients. He has a wife and a son that sounds like a child. I hope he thinks of them and still tries to be strong just for their sake. He needs to be prepared for what's coming. All those clients that he's speaking so fondly to are suing the hedge fund and its broker. https://www.johnschapman.com/investment-fraud/optionsellers-investment-loss-recovery/

Can't believe. This guy's been doing options for 20 years since 1999. He's a regular contributor on Marketwatch telling people why options on crude has never failed investors. And he's a regular contributor to CNN, Wall Street Journal, CNBC, etc. And he has published his book year after year "Complete Guide to Option Selling" on sale on amazon.ca. How can he not know the potentially unlimited risk of naked short options??!!!
 
MACD said:
Sweet Bobby, Thanks for this post. I have not been on Elite lately. And popped in today to see what maybe of value. Your post was on the top of the list and proved to be a real gem. I am an option seller and manage money for clients as well. Not sure why Mr. Cordier experienced the
"catastrophic loss" but usually this is caused by lack of proper reserves and allocation strategies. Mr.Cordier is a highly respected author and money manager so this makes it all the more interesting and perhaps frightening -- particularly to traders without much experience in hedging futures and options trades.

I attempted to research what "caused" the closure of Mr. Cordier's Hedge Fund. But could not find any current information. His website is basically closed, with just a splash screen providing contact info. Google searches were not of any real help either. Perhaps someone on this thread may know more but I can only speculate what really happened.
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He basically went all-in, fully leveraged on a naked short call on CL futures and got into a "short squeeze" due to a rogue wave and it was apparently so intense so fast that it wiped their entire fund and got margin-called by their broker so now not only he lost every single penny of all of 290 of his clients, his clients now even owe money to the broker of hedge fund.
 
I don't understand why clients are suing the hedge fund. Why are clients suing the fund since the fund is already bankrupt?

Even if clients win the case, they won't be able to extract money from a bankrupt entity.
 
Optionsellers.com must have totally lost the plot.
It appears they threw all their years of experience, teaching, guidance, risk systems and common sense out the window, with this resultant mess.
What's the lesson to all lesser mortals such as us?
If the biggest brains blow up, what hope is there for us dweebs, will we too suffer the same fate of committing financial suicide through madness?
It's like Jesus committing burglary.
 
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