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

[JSOP]

Some things you said seem contradictory. On one hand you cite the lawyer you seemingly contacted but then you seem to be unaware that that lawyer already is looking to file for class action and that he is looking for other like investors in this bankrupt fund. That is, however, clearly explained in the link you yourself provided. Which one is true as both can't be true at the same time?

Well to be fair, what happened with his previous firm Liberty Trading Group was not James' fault. It was due to the fraudulent action of his clearing firm Peregrine Financial Group and the firm Liberty Trading was actually one of the victims of that fraud as well. Majority of trading firms that cleared through Peregrine lost their money.

 

[GRULSTMRNN]

But there are still tons of big fat red warning lights that should come up for anyone who did their due diligence or just a simple web search. I rest my case on this issue.

Well to be fair, what happened with his previous firm Liberty Trading Group was not James' fault. It was due to the fraudulent action of his clearing firm Peregrine Financial Group and the firm Liberty Trading was actually one of the victims of that fraud as well. Majority of trading firms that cleared through Peregrine lost their money.

 

[JSOP]

That is the problem that anyone who tries to do a direct hedge against an intra-commodity spread using current and forward months will have. In the case of NG, which is traded 12 months of the year, sure, you can just go long on front month and short the following month. The big issue there is that no matter what happens, the two/three/four/five months in the future move in sync, so you will always be effectively net zero.

Perhaps the guy pulled the plug on his long leg and hoped for the market to keep going down. So he closed his longs with a huge losing monetary value. But he was so deep into his shorts that when the contract rolled, and so many OTHER shorts HAD to close to either reduce losses (like he may have done) or lock in profits, the thing went to the moon in a day. He then got margin-called on his shorts, so he was "short-squeezed" out, because he did not have enough cash to cover the short margins. If he did, the next day he would have been made whole again by getting way closer back to his entry point, when the market retraced back almost the whole way.

What I don't get is why you would call yourself a hedge fund if you are not ALWAYS hedged with something other than the shitty calendar-spread method? Did he have any options in there to do the offsets? It seems not. I figure that is what a hedge fund is supposed to do.

I really know nothing about options, but one thing I keep seeing over and over is to never ever "sell naked options." That isn't a hedge fund, that is just a one-way discretionary fund. In fact, my broker won't let you do it in your options account unless you donate a leg and sign away all your future children to their custody.

(Well, not really, but they take it seriously, heh.)

No he never does the long leg. He does nake shorts and that's what he did when the "rogue wave" hit. He does do vertical spreads and iron condors but only the premiums is high enough I suspect.

 

[Saltynuts]

So, is the apology video anywhere out there still? Seems to have been pulled - wise move no doubt given the lawsuits coming. But I'd sure like to see it!

 

[Overnight]

...There are real investors who’ve lost real money with this firm, and there is no reason to assume none of them would find their way here...
Or go find some good trades for tomorrow if you’re actually interested in trading instead of trolling.

...Ripping every statement apart is something that 12 year old kids do, and is easy to do with anything being said by anyone.

Welcome to the Internet. You're like 35 years late to the party. That is just the way things are here. Man.

Investing is the polar opposite of trading. Any 12 year-old would know that.

 

[JSOP]

But there are still tons of big fat red warning lights that should come up for anyone who did their due diligence or just a simple web search. I rest my case on this issue.

What other "tons of big fat red warning lights"??!! The only that came up is really this Liberty Trading Group which is really not his fault if you did the research on PFG scandal.

What happened here is something that happens quite common with option sellers and funds that tout option selling as a "safe income-generation strategy" like Karen the Supertrader.

 

[JSOP]

So, is the apology video anywhere out there still? Seems to have been pulled - wise move no doubt given the lawsuits coming. But I'd sure like to see it!

Trust me, you don't want to. It was the most painful 10 min.+ you will ever experience in your lifetime, watching somebody with bloody-shot eyes, apologizing and even breaking down at some point... Seriously the video sounded like a suicide note.

 

[Overnight]

...

What happened here is something that happens quite common with option sellers and funds that tout option selling as a "safe income-generation strategy" like Karen the Supertrader.

Does that have any relation to Sweet Bobby? I remember when I first came here some years ago that those two seemed interlinked. Was a weird thing.

 

[JSOP]

Does that have any relation to Sweet Bobby? I remember when I first came here some years ago that those two seemed interlinked. Was a weird thing.

Didn't think so.

 

[GRULSTMRNN]

Some of the other red flags were listed in another post earlier.

What other "tons of big fat red warning lights"??!! The only that came up is really this Liberty Trading Group which is really not his fault if you did the research on PFG scandal.

What happened here is something that happens quite common with option sellers and funds that tout option selling as a "safe income-generation strategy" like Karen the Supertrader.