RETAIL OPTION TRADER Makes $105MM PROFIT in the NDX, SPX & RUT

[ghateley]

Karen is legit. I also used to work at TDA/TOS and can vouch for Tom and Tony.

As far as the strategy of selling units (5 or 10 delta options in her case) on the idicies, it's not the most ridiculous strategy in the world as long as you have a ton of capital to handle those black swan type events. Nassim Taleb actually stipulated that way OTM vol is underpriced and not overpriced, it's still possible to make a whack of money if you are lucky just based on how the probabilities play out and using portfolio margin.

Good on Karen for trading her way to where she is today. She donates a ton of money to charity and is the farthest from some of the charlatans (*cough* SJOptions *cough*) that haunt the forums.

 

[kinggyppo]

Quote from 2rosy:

selling teenies

man haven't heard that term in a while!

 

[athlonmank8]

Can anyone here confirm this lady's btw?

 

[atticus]

Quote from athlonmank8:

Can anyone here confirm this lady's btw?

She had millions of unsegregated client money in her TOS account. She made a lot of money going all-in to the limits to RegT and then PM haircut.

 

[sle]

sell a teeny, drive Lamborghini

 

[newwurldmn]

Quote from atticus:

She had millions of unsegregated client money in her TOS account. She made a lot of money going all-in to the limits to RegT and then PM haircut.

You think she's legit?

Seems grossly irresponsible to trade that kind of size short vol.

 

[atticus]

Quote from newwurldmn:

You think she's legit?

Seems grossly irresponsible to trade that kind of size short vol.

I have no idea, but Sosnoff wouldn't leave himself open to that kid of fraud. Unfortunately, she commingled client money in her personal account with is certifiably retarded. No way to know how much was organic or added via AUM deposits, but the chick is nuts to go all in on short combos.

Sosnoff looks the fool for promoting it. I'll admit that I wired out of TOS when I saw this clip the for the first time.

The blowup will be just as spectacular.

 

[luisHK]

Quote from ghateley:


As far as the strategy of selling units (5 or 10 delta options in her case) on the idicies, it's not the most ridiculous strategy in the world as long as you have a ton of capital to handle those black swan type events. Nassim Taleb actually stipulated that way OTM vol is underpriced and not overpriced, it's still possible to make a whack of money if you are lucky just based on how the probabilities play out and using portfolio margin.

What you mean referring to Taleb is that Karen's strategy is actually a losing proposition ?

 

[athlonmank8]

Quote from atticus:

I have no idea, but Sosnoff wouldn't leave himself open to that kid of fraud. Unfortunately, she commingled client money in her personal account with is certifiably retarded. No way to know how much was organic or added via AUM deposits, but the chick is nuts to go all in on short combos.

Sosnoff looks the fool for promoting it. I'll admit that I wired out of TOS when I saw this clip the for the first time.

The blowup will be just as spectacular.

always a great read thanks atticus.

Maybe Sosnoff has a soft spot since TOS was his baby.

 

[mushinseeker]

This is how i interpret her strategy.Tell me if I am way off, eg. XYZ at $100.
Sell 10 90/110 strangles, if XYZ goes up to 107, buy back or roll the call side from 110 to 115, this costs her $ so she needs to get that debit back by selling puts to recoup the cost. Since time has passed, there wouldn't be enough juice to cover the cost of the call since puts has depreciated thru time. This is the scary part, she has to sell more puts and calls to get most of her call debits back. IOW, double down!

OMG, what happens if XYz does not creep up but gap up.
what happens on whipsaws where market is up 1% day 1 and down 1% day 2. supposedly she is geared at 50% of her cap .

I also think sosnoff is just being polite.