Update from Karen the Supertrader

[SunTrader]

So she could still trade for herself. Well, if she really does have a winning strategy, she really doesn't need other people's money or trade other people's money to become rich.

And if Pigs could fly .....

 

[Nine_Ender]

Lowest return 11%, highest 50%. She doesn't say she made 100MM, Bobby just (incorrectly) assumed it. Some of the capital grow came from investors, not from profits. The point here is that she didn't turn 1 MM into 100 MM. Still, returns between 11% and 50% are very nice. That is why I still don't get it; why the funky accounting?

I don't believe those return numbers for a minute. You seem to be missing why what she did was a fraud.

 

[SimpleMeLike]

once i knew i could make repeatable returns i figured out i didn't need the hassle of clients and have been a private trader since.

Hello MarkBrown,

This is the 2nd best post I read on ET forum is a very long time.

Thanks,

 

[themickey]

That’s the best you’ve got?

At the beginning of your video on Karen, she immediateky leapt in to talk about Jesus, my immediate thought was "ffs, not again with this Jesus rubbish, it's like covid, everywhere."

 

[TheDawn]

she doesn’t have a winning strategy. Selling strangles on the spx without some system to determine rich and cheapness of vol is trying to exploit risk premium in one of the most efficient asset classes in the world.

I said "if she really does have a winning strategy"

So she could still trade for herself. Well, if she really does have a winning strategy, she really doesn't need other people's money or trade other people's money to become rich.

But the thing is, nobody would be able to determine with certainty the rich and cheapness of vol. Everything is all relative and depends on what happens in the future. If there is a volatility crush happens, even the current 20 IV will still be too rich but if there is a huge explosion in volatility, then even 100 IV is still too cheap. And that's where the excess return comes from. If everybody knows with certainty how much the market is going to move in T+1, then there will be no excess return. The options will give the same return as term deposits.

And she does have a system. She uses Bollinger bands to gauge standard deviation and trades options outside of 2 standard deviations. Dunno if it's the same system that she uses now. I fell asleep 5 minutes into the video.

 

[newwurldmn]

No one knows anything with certainty. When you trade options you predict vol. it’s no different than trading stock and predicting direction. Some people have a system that gives them an edge others just sell options because they assume vol is always rich (no system)

I said "if she really does have a winning strategy"



But the thing is, nobody would be able to determine with certainty the rich and cheapness of vol. Everything is all relative and depends on what happens in the future. If there is a volatility crush happens, even the current 20 IV will still be too rich but if there is a huge explosion in volatility, then even 100 IV is still too cheap. And that's where the excess return comes from. If everybody knows with certainty how much the market is going to move in T+1, then there will be no excess return. The options will give the same return as term deposits.

And she does have a system. She uses Bollinger bands to gauge standard deviation and trades options outside of 2 standard deviations. Dunno if it's the same system that she uses now. I fell asleep 5 minutes into the video.

 

[The_Krakenite]

She uses Bollinger bands to gauge standard deviation

Interesting. From what I read a while back, Bollinger Bands had its use until a year after John
Bollinger was peddling his book in multi-countries. Yes, the book sold like wildfire. And a year after publication back-tracking statistics show that any opportunities in the markets used by this tool have been arbitraged away. (almost every platform has this tool/metric even still, and its usefulness is now defunct).

Anyway, every Fibonacci fan, Elliot-wave nutcase, and other tea-leaves reader is going to flame me now for saying it. Oh well, I said it. Time to get my shields up.

 

[SunTrader]

Yup fibs and Elliott Wave (2 for the price of 1) don't work either, even though they worked in 1929 before they were even widely known. Keep believing it please :

 

[TheDawn]

No one knows anything with certainty. When you trade options you predict vol. it’s no different than trading stock and predicting direction. Some people have a system that gives them an edge others just sell options because they assume vol is always rich (no system)

EXACTLY that's why no one really has any winning strategy and she's just like anybody selling options or option spreads.

But when you trade options, you are predicting vol. + direction not just vol. That's why options are much harder to trade than stocks cuz with stocks, you are always dealing with 100% delta and 0 implied volatility. And that's also why options are so much more lucrative.

 

[The_Krakenite]

If you have time to waste, or are just super-nerdy, here's an oldie: