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

[JSOP]

Wow, OUCH! I do feel sorry for the guy, at least a little. I'm sure he thought he had it figured all out. Was making money for himself, and his investors. Then BOOM his life is forever changed, and will never be the same. Fuuuuuu.

Yeah that was the feeling that I got too. He genuinely thought he had a "safe" investment method that generates a steady income for his investors and it was working out. He wasn't conning people money or defrauding people or anything. And naked option premium does seem to be investors the best of both worlds at times, both "safe" and profitable until it's not. And when it's not, if you are not hedged and/or you did not cut loss early, then you are royally screwed which is what happened.

I used to do naked shorts as well. I am glad I stopped long time ago after I suffered some losses and realized that it's not as "safe" as I thought it was. Judging the abundance of promotional material about the safety and profitability of option selling, this guy is not the only who is losing his clients' money and won't be the last.

 

[manonfire]

The fact that they aren't allowed to short naked calls in an IRA is probably why the lawyer is going after FC Stone. None of the documents talked about naked options. The IRA was set up through Midland as a self-directed IRA.

If you did not sign an agreement to allow naked shorting then fuck them, they should make you whole. Get a new attorney.

 

[JSOP]

Wow. Unbelievable. I was able to download the video earlier today using savemedia.com, as I had a feeling it would disappear. I just tried to upload it here but was unsuccessful - maybe it's too large?

Post a link if you want. Sorry for your loss btw. Hope you are able to recover your funds soon.

 

[smallfil]

Similar to insurance, most of the time it's not used. OptionSellers was paid to manage the risk otherwise.

There is no excuse for not managing the risk considering he was trading probably, tens of millions of dollars all at once. Greed probably, took over and he figured the worst case scenario will never happen. So, he passed on the insurance. That is buying a higher strike calls to hedge his position and reduce the risk. As an options trader, the most important thing to me is managing the risk before I get into any trade. I know I will blow up my account if I do not manage that risk. So, what more for someone trading tens of millions?

 

[PJB1994]

Thank you for explaining. There must be some law against your broker allowing a naked short fund for your IRA, even if it is self directed.

I am sorry for you.

Good luck and take care.

Thank you. It's been quite a shock and emotionally draining. The whole reason we went with OptionSellers was to better diversify our investments and lessen the risk. Risk control, not huge profits, was the main advertised focus of OptionSellers, but it seems they got careless and did not do as advertised/promised.

 

[PJB1994]

If you did not sign an agreement to allow naked shorting then fuck them, they should make you whole. Get a new attorney.

It's still early but I'm hoping there will be a class action lawsuit. The only attorney I've seen advertise this is the one I mentioned earlier, and I have no idea if he's even any good. We'll definitely be taking legal action one way or another. I just cannot fathom that anyone would be allowed to do naked calls on an IRA - bad enough to get your taxable account wiped out (plus some) but an IRA is harder to swallow.

 

[manonfire]

You have the paperwork within you reach if you retained it. This is not a scooby doo mystery to be resolved.

 

[PJB1994]

Post a link if you want. Sorry for your loss btw. Hope you are able to recover your funds soon.

I copied it to my hard drive so can't provide a link. I did find this video online which has his apology embedded within it.

 

[GRULSTMRNN]

It's obvious this guy is not gonna offer any additional information that would make his story in the slightest credible. He already contradicted himself so many times that I am convinced he is not what he states he is.

You have the paperwork within you reach if you retained it. This is not a scooby doo mystery to be resolved.

 

[PJB1994]

You have the paperwork within you reach if you retained it. This is not a scooby doo mystery to be resolved.

There was nothing I could find in the paperwork about naked options. Midland did mention that futures were allowed. If you are interested, look up Midland Self-Directed IRAs & 1031s. I wonder if Midland has any responsibility for allowing naked options?