What does Karen the Supertrader and her results say about volatility? Oversold?

Discussion in 'Options' started by shooter, Feb 16, 2014.

  1. FHS

    FHS

    what strike? how do you know?
     
    #351     May 23, 2014
  2. jamesbp

    jamesbp

    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!
     
    #352     Aug 21, 2014
  3. Where? Is she getting interviewed on tastytrade?

    11% YTD is still pretty decent. I think she goes really far OTM in put selling.
     
    #353     Aug 21, 2014
  4. vanv0029

    vanv0029

    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.
     
    #354     Aug 21, 2014
  5. jamesbp

    jamesbp

    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!
     
    #355     Aug 22, 2014
  6. #356     Aug 22, 2014
    KeLo and RichardRimes like this.
  7. 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.
     
    #357     Aug 23, 2014
  8. 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...
     
    #358     Aug 23, 2014
    traderlux and RichardRimes like this.
  9. 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.
     
    #359     Aug 24, 2014
    darwin666 likes this.
  10. 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...
     
    #360     Aug 24, 2014