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

[JSOP]

Sure, they have some theta and some vega, but in a fixed tick pricing world that realizes very discretely and kinda irrelevant. In the risk manager error thread, I wrote a whole treatise on how selling the wings is about non-spot greeks becoming the primary drivers of your PnL and how scary that is.

Well when they are unhedged, anything is scary because anything can happen no matter how "tailed" they are especially when they are combined with high leverage.

 

[JSOP]

"It's much easier to predict where a commodity won't go than to predict where it will go" - James Cordier.

I hope the courts do not turn a blind eye to this. What do you guys think? Does he spin this the right way to the jury? LOL one look at that spread sheet and you can tell he was thinking to himself "Natty will NEVER go to 5". Never say never

If he wants to work on the jury, he needs to take that watch and those cufflinks off. Apparently they are not popular with the masses. LOL

 

[Daal]

Thats why perma options selling sucks, you are forced to stay super small in size so the profitability (when it exists) is not that significant. The alternative, like this guy did, is to lever up and sell more options than its prudent. It might work for a while but one day that will bite you in the ass.

 

[tsznecki]

Saw the excel. If they simply sold the puts, they would be just fine. Don't ever recall NG crashing downwards.

 

[ZBZB]

Saw the excel. If they simply sold the puts, they would be just fine. Don't ever recall NG crashing downwards.

When shale gas came online NG had a massive downtrend. Look at the monthly chart on tradingview for 2008/2009. Went from 13.5 to 2.5. The winter/summer spread April/May led to a hedgefund wipeout on several Billion dollar losses. It is called the widowmaker spread.

 

[GRULSTMRNN]

Disagree. Same. Suicide, death penalty or life long sentence. There are things a human being especially adults, need to be cognicent about which is that certain violations can kill people. The end result is the same, whether you speed and kill people or whether you are drunk driving or are in other ways grossly negligent which costs peoples' lives. Speeding a train just above the limit is a different thing than racing at double the speed limit. A driver who races at 50 miles per hours through a 25 miles per hour speed limit zone and kills a child should in my opinion be seated on the electric chair. Judgment "not fit to live among the rest of society"

Don't joke about suicide. It's not something to joke about. I highly doubt that the guy would be reading this forum, but if he did, no need to say something that would push him over the edge.

I'm pretty sure that for legal warnings, there must have been some warnings about the risks involved with investing. As I said earlier, usually there is some disclaimer that the value of the investment could go to zero (although I'm not sure if the possible loss of more than invested capital was disclosed).

In any case, in terms of punishment...here's a far worse accident where people actually died and many injured along with property damage:

https://www.oregonlive.com/pacific-...f/2018/01/amtrak_engineer_says_he_misjud.html

The conductor admitted to going faster than the speed limit by almost double (79 in a 30). I find this to be very similar to what happened to the fund manager. The fund manager was basically doing the equivalent of 79 in a 30 and was prepared to reduce risk when he thought it was necessary misjudged what he thought would happen just like the conductor. So they both misjudged and caused damage. So what, in your opinion, should happen to the conductor? I'm not sure if the conductor has faced any penalty, but there are no cries encouraging the conductor to be stripped of his clothing and forced to commit suicide. I see this as being a class issue. People are simply more tolerant of mistakes made by members of the middle and lower class than the upper class.

 

[GRULSTMRNN]

Exactly and if he indeed loaded up on those tail shorts he should be held liable even with his personal assets down to the last gold crown in his wive's mouth. But his watch must go first

No, dude, these things are safe.

To quote my first boss, a veritable source of trading wisdom, "selling tails is like sleeping with strangers - easy and very pleasureful but one morning you will regret it"

 

[RedDuke]

Wow did anyone see those spreadsheets. As i thought a shit ton of otm feb calls. What a horrid trade, he was collecting premiums like 5 cents a contract but sold a shit ton of them barely any theta decay. Basically wait until expiration to close out.

He exposed himself to bigtime vega risk for so little reward and he had to sell so many for the measly premiums. That is total gross negligence he should know better. Those positions are total amateur hour. He never gave a shit putting his clients at enormous risk since he has no skin in the game. Did his clients see these spreadsheets? I guess it did not raise alarms for them.

My point exactly. Clients with managed accounts get daily and monthly statements of all trades, did anyone look at them?

 

[GRULSTMRNN]

Not those who consider those investments fuck-you money.

My point exactly. Clients with managed accounts get daily and monthly statements of all trades, did anyone look at them?

 

[ZBZB]

When shale gas came online NG had a massive downtrend. Look at the monthly chart on tradingview for 2008/2009. Went from 13.5 to 2.5. The winter/summer spread April/May led to a hedgefund wipeout on several Billion dollar losses. It is called the widowmaker spread.

March April spread is the widowmaker. Went from 30c to $1.50 last week