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

[prc117f]

Why? Because this Schmuck CEO still wears a watch, probably sits on a fat mansion and most likely has grossly violated his fiduciary duty that he contractually and by law assured his investors. I hope they strip him naked and then he can commit suicide. Zero compassion with criminals like him.

I would have made the video wearing a barrel and suspenders under a bridge next to my tent. What an idiot did he actually think wearing a rolex in that video is a good idea?

 

[RedDuke]

But what about fills then? How can you guarantee that each account will be able to get fills? And if each can't, one does someone get a better fill? In a fast moving market, the difference in fills can be huge, and some might not even be filled at all.

Very easy. Each CTA trades of master account, at the end of the day he/she sends allocation break down to the broker based on each client account size. All trades of the same strike/expiration are usually lumped together with APS (average price). It is quite simple and CTA can trade this way across multiple brokers via something that is called give up agreement.

 

[prc117f]

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.

Holy shit this has to be criminal at this point, so they will be able to go after his personal assets.

 

[prc117f]

Losses that occurred with the exchange going out of business do not seem directly related to Cordier's conduct at that time and affected all individuals dealing with that exchange. As to the other complaint, the adjudicating body found that Cordier conducted himself properly in some respects, but made an error as part of closing down that client's account. You can easily find this on the internet and read for yourself. I am not greedy and was looking for relatively modest returns from what was supposed to be a very conservatively managed strategy. Ratio credit spreads, other types of vertical spreads and other risk mitigation strategies are well understood by practitioners in this space and Cordier himself advocated these techniques in his book, videos, and personal representations. A person is not gullible if such techniques are available, perform their desired function in limiting risk, are understood and practiced by industry practitioners, and are assured by their money manager that he is an expert in such practice and techniques and that client funds will be managed conservatively in accordance with conservative principles. This person deceived us and induced us to enter into a relationship with him that deviated from his stated approach. From my point of view, his actions are in breach of contract and his fiduciary responsibilities, tortious, and criminal in some regards, and I expect that a court will likely find this to be the case. In any event, I do not want to further engage in this rhetoric with you since you seem determined to slander me and the other victims.

What kind of returns were you expecting, in his interviews he mentioned 25-28% returns. Is that what he told you he could achieve?

 

[prc117f]

Would you yourself seriously place funds with a manager that has a history of suits, complaints against him and leaves a long negative internet trail? That is not hindsight, that is doing due diligence. All that. Information was available before his latest money grab venture.

And yes, you can find hundreds of individuals with decades of track record who are not mentioned in law suits or complaints. Re risk, no risk no gain... Simple as that. As long as the taken risk commensurates with the stated risk sold to investors.

Whats your problem the guy lost his money why kick a an injured dog. Have some empathy.

 

[RedDuke]

To be honest, I'm not sure if this is even possible (but its not like I know anything). I would imagine that if some guy is trading my account, each fill has to already match some account, either mine or someone else's. How can you prorate a fill across multiple accounts when the trade has already happened in a clients account? Its not like he is working from a master account and then transfers these fills at will to the sub accounts, trying to make it all roughly equal.

Trades happen in master account and CTA can pick and choose within certain boundaries. For example, a client calls in the morning and tell CTA to liquidate all positions at market. Then later the same day market moves against CTA and he closes positions for the rest of clients (those clients will get aggregate). The client who called earlier will get more favorable price.

 

[semaj68651]

I keep having nightmares of Nov/Dec 2003. I started selling naked options in gold futures in 1999 & building my account from $20000 to about $300000 in 2003. Nov 2003 I got the bright idea of selling naked options in NG because to premium look great. I lost0 $400,000 in 6 hours .

 

[semaj68651]

I was driving a cross SFO BAY BRIDE when my FCM risk mgr called me omg that cold water look good for about 2 mins. I say I ignored all my trading rules . If I had wrote widespread credit spreads I would have a had limited loss. it was my first trading account

 

[ironchef]

Schwab is dumb. It doesn't even allow covered option writing or option spreads or option buying which are all allowed in IRA. In actuality, investment in options in any form is allowed even naked option writing as options is not on the list of prohibited investment under IRS which is the only governmental body that sets the rules as to what is and what is not allowed in an IRA. The only reason why naked option writing with margin is generally prohibited in an IRA is it could trigger UBTI taxes because it's considered borrowing from an IRA. Some brokers might even allow naked option selling if it's 100% cash secured and no leveraged margin. IRA custodians do have the right to allow or restrict whatever investments that goes into an IRA even if it's allowed by the IRS.

I can do buy-write, cash secured, go long call/put, spread, calendar fly... but not naked. Don't think they allow naked short future or short options on future.

 

[JSOP]

I keep having nightmares of Nov/Dec 2003. I started selling naked options in gold futures in 1999 & building my account from $20000 to about $300000 in 2003. Nov 2003 I got the bright idea of selling naked options in NG because to premium look great. I lost0 $400,000 in 6 hours .

Naked shorting is like fraud schemes: If the premiums looks too good to be true, chances are it is.

Hope you recovered that $100K loss by now.