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What does Karen the Supertrader and her results say about volatility? Oversold?
- Thread starter shooter
- Start date
She's back ... Sosnoff reckons she has knocked it out of the ballpark with a return of 11% so far this year .... but only in comparison to his own enormous losses .... and barely ahead of the S&P .... despite using massive leverage in a doozy market for premium sellers ....
Maybe the 'Karen the outlier' has just reverted to the mean!
Maybe the 'Karen the outlier' has just reverted to the mean!
Where? Is she getting interviewed on tastytrade?
11% YTD is still pretty decent. I think she goes really far OTM in put selling.
11% YTD is still pretty decent. I think she goes really far OTM in put selling.
Where? Is she getting interviewed on tastytrade?
11% YTD is still pretty decent. I think she goes really far OTM in put selling.
I think Karen may be slightly suspicious. Tasty Trade posted this trade on Bob today.
It does not say it is related to her, but her discussion was using this type of trade.
Sell 1 Oct 18 SPY 210 call for 0.1 CR
Sell 2 Oct 18 SPY 166 put for 0.16 CR
As a SPX spread credit is 260 dollars per spread. IB shows each spread as using
up 16000.0 of my portfolio margin. If Karen really has a 300 million portfolio it would
take a lot of these spreads to make much difference, and there does not seem to be nearly
enough volume in these very far OTM options. Karen does say she uses TOS retail
platform.
I think Karen may be slightly suspicious. Tasty Trade posted this trade on Bob today.
It does not say it is related to her, but her discussion was using this type of trade.
Sell 1 Oct 18 SPY 210 call for 0.1 CR
Sell 2 Oct 18 SPY 166 put for 0.16 CR
As a SPX spread credit is 260 dollars per spread. IB shows each spread as using
up 16000.0 of my portfolio margin. If Karen really has a 300 million portfolio it would
take a lot of these spreads to make much difference, and there does not seem to be nearly
enough volume in these very far OTM options. Karen does say she uses TOS retail
platform.
Don't worry, Sosnoff can't get his head round it either ... just can't handle the risk / leverage ...
On the other hand, it may just be complete fiction ... paper trading for publicity!
https://twitter.com/tastytrade
see all the links uploaded for Karen Super trader interviews and the pdf they summarized her trading style attached
https://www.tastytrade.com/tt/daily_recaps/2014-08-21?locale=en-US
see all the links uploaded for Karen Super trader interviews and the pdf they summarized her trading style attached
https://www.tastytrade.com/tt/daily_recaps/2014-08-21?locale=en-US
Attachments
I don't know specifics of what karen does but doesn't she sell the SPX index options instead of the SPY options? In any case, not sure how far OTM she is too. Its possible she is long biased on the market too by selling puts closer to the money and calls further out in their strangle trades.I think Karen may be slightly suspicious. Tasty Trade posted this trade on Bob today.
It does not say it is related to her, but her discussion was using this type of trade.
Sell 1 Oct 18 SPY 210 call for 0.1 CR
Sell 2 Oct 18 SPY 166 put for 0.16 CR
As a SPX spread credit is 260 dollars per spread. IB shows each spread as using
up 16000.0 of my portfolio margin. If Karen really has a 300 million portfolio it would
take a lot of these spreads to make much difference, and there does not seem to be nearly
enough volume in these very far OTM options. Karen does say she uses TOS retail
platform.
there is very less room for error on the call side... u hardly get any premiums. infact u get burned badly. as u r forced to come close.. fat OTM.. look at the call premiums.. not worth the risk/reward.. efficient mkt hypothesis. every darn thing is perfectly priced in.. selling puts since 2009 has been a walk in the park. till one day. when ALL KAREN style. naked put sellers will be hit by something that could never imagine.. . this is INEVITABLE...
Her strategy, and I'm not defending it, is she likes to do strangles because it maximizes profit taking of premium provided her range is set correctly.
So, if she's going to sell puts, she might as well sell calls because it won't cost her more margin.
The index is relatively smooth on a longer term scale, unlike individual stocks that can have much more volatility and higher beta. So, it is possible to sell a call far enough OTM that it can be a hair away from being ITM at expiration. And if not, she can adjust her position as she says.
So, if she's going to sell puts, she might as well sell calls because it won't cost her more margin.
The index is relatively smooth on a longer term scale, unlike individual stocks that can have much more volatility and higher beta. So, it is possible to sell a call far enough OTM that it can be a hair away from being ITM at expiration. And if not, she can adjust her position as she says.
agree, Dan Sheridan at a recent webinar talked about the "blind squirrel on roller skates" and the "guy who gets the nod from his postman" for their great "skills" at selling naked premium........selling puts since 2009 has been a walk in the park. till one day. when ALL KAREN style. naked put sellers will be hit by something that could never imagine.. . this is INEVITABLE...