The billion-dollar high-speed internet scam

[dealmaker]

The billion-dollar high-speed internet scam:Elizabeth Pierce co-founded Quintillion Subsea Holdings, a startup in Anchorage trying to build a trans-Arctic data cable that would improve web speeds for much of the planet. The mission captivated the public. Pierce raised $270 million in funding by impressing investors with her ability to rack up major telecom-services contracts — until they learned she was the only one who’d signed them.(Bloomberg)

“The question is not why Elizabeth did it, but rather, how did she think she’d get away with it?”

 

[Nobert]

Faking signatures in multi-million dollar deals.

 

[guru]

Total scam, but just a thought: every time you trade an option you’re signing a contract after convincing the other party that buying or selling you an option will be good for them. Then you look at the contract they signed (the option you’ve sold them or now own), and laugh at how stupid they were for signing that deal.
Except they’re doing the same, and the question becomes who was a better scammer, ugh, I mean “trader”.

 

[BlueWaterSailor]

you look at the contract they signed (the option you’ve sold them or now own), and laugh at how stupid they were for signing that deal.

When I sign a business contract with a vendor, neither of us is scamming the other; we've both agreed to the deal because we see it as beneficial. Option contracts are not any different - and if you believe they are, then you are indeed being scammed. Except the conman is right there in the room with you, and you can see his reflection in your monitor.

 

[guru]

When I sign a business contract with a vendor, neither of us is scamming the other; we've both agreed to the deal because we see it as beneficial. Option contracts are not any different - and if you believe they are, then you are indeed being scammed. Except the conman is right there in the room with you, and you can see his reflection in your monitor.

So business deals are beneficial to both parties, just like buying/selling an option between two parties is beneficial to both of them? No one loses? Both of them win? Both make money? Both are happy? Both have improved the world and their own lives? Maybe Citadel also wants everyone to make money and share their success?

Maybe you don't realize this, but when I sell you an option, I want to make money - and unfortunately this means that I need you to lose money so that I don't lose. When market makers buy my option, they also need to move the market in a way that they and I don't lose, but someone else may.
My scam comparison was extreme just because I needed an evil chuckle today for my selfie (or mirror reflection as you've put it), but trading is nothing like business deals - it's a championship, it's ruthless and only the best ones win - traders want excitement and success, they want to be best and they want to be Muhammad Alis or Citadels of trading, not some guy signing some business contracts and live happily thereafter. It's a fight and they're here to win, otherwise they indeed do something else like signing some business contracts and stay away from the fight (trading).

 

[Cuddles]

So business deals are beneficial to both parties, just like buying/selling an option between two parties is beneficial to both of them? No one loses? Both of them win? Both make money? Both are happy? Both have improved the world and their own lives? Maybe Citadel also wants everyone to make money and share their success?

Maybe you don't realize this, but when I sell you an option, I want to make money - and unfortunately this means that I need you to lose money so that I don't lose. When market makers buy my option, they also need to move the market in a way that they and I don't lose, but someone else may.
My scam comparison was extreme just because I needed an evil chuckle today for my selfie (or mirror reflection as you've put it), but trading is nothing like business deals - it's a championship, it's ruthless and only the best ones win - traders want excitement and success, they want to be best and they want to be Muhammad Alis or Citadels of trading, not some guy signing some business contracts and live happily thereafter. It's a fight and they're here to win, otherwise they indeed do something else like signing some business contracts and stay away from the fight (trading).

except you don't know when the seller initially bought the contract, so really both of you may have made money. Sure there are losers and it's how wealth gets transferred, but the direct party you're transacting with didn't necessarily get the short end of the stick.

 

[BlueWaterSailor]

So business deals are beneficial to both parties, just like buying/selling an option between two parties is beneficial to both of them? No one loses? Both of them win? Both make money? Both are happy? Both have improved the world and their own lives? Maybe Citadel also wants everyone to make money and share their success?

Keep going; I'm fascinated. Can you let me know when you're about to get to the "save the world and cure cancer" part? I don't want to drop my popcorn.

Maybe you don't realize this, but when I sell you an option [...]

You clearly don't realize this, but you don't sell me an option. Perhaps learning how the market actually works would be useful?

Clue: If I buy insurance, the value I'm looking for is not the same one the insurance company wants. I'm satisfied with a year of coverage at a price that I consider reasonable; they're satisfied with the premium I pay them. Neither one of us is scamming the other.

Until and unless you understand this transactional model - which you clearly do not - there's not much point in going on. As long as your world consists solely of zero-sum games, we don't have any basis for further discussion, so I'll just wish you a pleasant day.

 

[guru]

Keep going; I'm fascinated. Can you let me know when you're about to get to the "save the world and cure cancer" part? I don't want to drop my popcorn.

You clearly don't realize this, but you don't sell me an option. Perhaps learning how the market actually works would be useful?

Clue: If I buy insurance, the value I'm looking for is not the same one the insurance company wants. I'm satisfied with a year of coverage at a price that I consider reasonable; they're satisfied with the premium I pay them. Neither one of us is scamming the other.

Until and unless you understand this transactional model - which you clearly do not - there's not much point in going on. As long as your world consists solely of zero-sum games, we don't have any basis for further discussion, so I'll just wish you a pleasant day.

Sure, this is one example but not related to my example.
Many traders are in it for the sake of trading: quickly in & out, with no purpose of getting insured or anything, just to simply make money and not worry that someone else loses. Possibly penny stocks would be a better example, but there are plenty of examples in options as well.

Either way, when someone loses then their money probably didn't go into the abyss.
It would be interesting if a trader who's lost everything and lost faith in humanity, could see a list of all people who took his/hers money, one way or another. What if you would be on that list? But of course it's nice to feel good about winning, looking in the mirror and admiring ones smarts and how someone else's wealth got transferred to you.
Maybe people who've lost money in the stock market should be given such a list of people who took their money, so they could truly understand what & who they're playing against.
Otherwise right now many new traders just assume that everyone makes money in the stock market and everyone is their friend.
It was just a reflection, but also a big can of worms.

 

[BlueWaterSailor]

Sure, this is one example but not related to my example.
Many traders are in it for the sake of trading: quickly in & out, with no purpose of getting insured or anything, just to simply make money and not worry that someone else loses. Possibly penny stocks would be a better example, but there are plenty of examples in options as well.

I don't actually have the slightest problem with people doing victory dances, imagining themselves as The Maker of Desolation in the Markets, etc. when they take a profit... the market will humble them quickly enough if they bring any of that silly shit into their trading room. Outside of it? More power to'em. It's not what turns me on, but there are plenty of folks for whom that's the main motivation.

It would be interesting if a trader who's lost everything and lost faith in humanity, could see a list of all people who took his/hers money, one way or another. What if you would be on that list?

Heh. I will admit, that one does deserve an evil chuckle at the very least. You could probably do a movie.

Otherwise right now many new traders just assume that everyone makes money in the stock market and everyone is their friend.
It was just a reflection, but also a big can of worms.

Sure; it's always possible to find outliers at either end of the scale. Both the ultra-naive and the ultra-predatory. I just don't think that either one is a high-probability survival behavior in the markets (although a rather large amount of aggressiveness, much more than would be acceptable in "polite society", is.)

A large part of my point is that not every trade is directly aimed at producing immediate income. Consider hedging, non-speculative uses of futures, bank-level forex operations, etc. When someone buys a put to marry to a stock in their basket, they're paying for protection; much like that insurance scenario. Much of what goes on in the market is rather mundane business operations; that may be easy to forget if your focus is purely speculative.

 

[SunTrader]

Someone who sells me an option (btw I don't trade 'em) might be offsetting/hedging something else. So the loss they might take is made up somewhere. Or vice versa the profit they make on me might offset a loss elsewhere.

Ultimately it is a zero sum game but not always how it may appear on the surface.

Or as it was said above both can "win".