Tastytrade Review + Criticism
- Thread starter Lucas
- Start date
Does her fund post performance anywhere?
Selling for premium is really hard to hedge especially with VIX over 50. Anyone knows the name of her fund? I can look at few databases.
Just Hope Hedge Fund
I suspect she is (relatively speaking) just fine with this last move.
I suspect if S&P pulled a 1987 (I know, I know, curbs/limits now blah blah blah, just see Fukushima please or any other crazy outlier event where the market will wait out limit timeframes/closures and still keep crashing), then she would be out of business.
The problem is that she needs liquidity and in the short premium market getting liquidity for a billion $+ book (given leverage) is not so easy as say, underlying futures trading. I think it is much better suited to 7 figure accounts or smaller...
The lack of deeply liquid option instrument choices means that once you get to a certain size, you either diversify away from her type of strategy or one day you go bust trying to meet return expectations...
This brings back the old adage, you never want to be the market, especially if you have leverage on (and thus can be forced to liquidate).
I suspect she is (relatively speaking) just fine with this last move.
I suspect if S&P pulled a 1987 (I know, I know, curbs/limits now blah blah blah, just see Fukushima please or any other crazy outlier event where the market will wait out limit timeframes/closures and still keep crashing), then she would be out of business.
The problem is that she needs liquidity and in the short premium market getting liquidity for a billion $+ book (given leverage) is not so easy as say, underlying futures trading. I think it is much better suited to 7 figure accounts or smaller...
The lack of deeply liquid option instrument choices means that once you get to a certain size, you either diversify away from her type of strategy or one day you go bust trying to meet return expectations...
This brings back the old adage, you never want to be the market, especially if you have leverage on (and thus can be forced to liquidate).
If Karen survived today she's pretty lucky. In one of the interviews she describes the flash crash and how she had to "work" with TD ameritrade on rolling out her positions. She got more aggressive in recent years based on the recent interviews and sold twice as many puts as calls. If you looked how the open was traded today, it looked like lots of liquidations happened. Who knows though, she may have called it a day and maybe was watching from the sidelines. All I can say is I wish I did the same
Has TT ever mentioned her since the Aug 24 mini-crash? I was curious as I don't watch the show. She may have been smart enough to be hedged but I assume many of her followers were not
Events like August of 2015 won't do that much damage to her strategy. She's already stated in all her interviews that when faced with significant drawdowns, she just rolls them out to further months and doubles down on her put selling.
So for August, she would have rolled to October and sold twice as many puts. Things recovered, so she would have survived just fine.
The time when Karen and all her clients will lose everything will be something more similar to a 2008 event. She rolls out, doubles down, and it goes further against her. She rolls out, doubles down, and it goes further against her.
That will be the end of Karen. 7 great years followed by an OH THAT'S WHY my strategy was crappy....
So for August, she would have rolled to October and sold twice as many puts. Things recovered, so she would have survived just fine.
The time when Karen and all her clients will lose everything will be something more similar to a 2008 event. She rolls out, doubles down, and it goes further against her. She rolls out, doubles down, and it goes further against her.
That will be the end of Karen. 7 great years followed by an OH THAT'S WHY my strategy was crappy....