Fund loses 600mil (15%) doing spreads

Discussion in 'Options' started by RedDuke, Feb 17, 2017.

  1. ironchef

    ironchef

    Can you explain why it is so obvious? Not obvious to me.

    Thanks.
     
    #51     Feb 19, 2017
    Gasparov likes this.
  2. newwurldmn

    newwurldmn

    Beware of anyone who claims something in the market is "obvious." Likely is that they don't know that they are missing half the story or more.
     
    #52     Feb 19, 2017
    Pippi436, CBC, sle and 1 other person like this.
  3. I agree,

    Nothing in the market is obvious or guaranteed. -- Just when you think or assume so...the market seems to throw you a joker wildcard o_O:confused: ...that leaves you scratching your head and wondering and thinking so much why in hindsight.

    Always be open-minded and flexible as a trader,
    Because the market is part art, part science...much more so...the shorter the trading time frame,
    (as opposed to very longer term investing)
     
    #53     Feb 19, 2017
    Gasparov likes this.
  4. Gasparov

    Gasparov

    If you couldn't tell the /ES and /NQ would be up all week I assume you are not a technical trader (or blind).

    This is good advice nonetheless, never assume you know anything because you may get sloppy and miss the signals when the market is changing. BUT it doesn't mean you can't know something by reading it properly.


    Yes, if you look at the charts on multiple time frames (weekly, daily, 4 hourlies and more) you will see that there is absolutely nothing that would support any sort of drop off or correction. Until the market tells you it's time for a serious correction or reversal, it's completely stupid (and obvious to me at least) to trade against it. Not only that, but the market made a drop off and gathered its strength already two or three times the past week in the shorter term, so it's not like it's running up faster than it should be. It's a completely justified uptrend right now. I don't know if they were shorting the past week or the week before but I read the article was posted Feb 17 so I assume they did it the past week and perhaps for longer. Definitely one of the dumbest trades I've heard about.

    Never listen to someone who says nothing is predictable in the market or that everything is random.
     
    Last edited: Feb 19, 2017
    #54     Feb 19, 2017
    fordewind likes this.
  5. prc117f

    prc117f

    I never understood the philosophy of selling spreads to make like 10 cents a contract after the whole complex trade is set. Way over complex, tricky to manage and in the end. I like to structure my trades real simple. I stick to the KISS principle when trading options.

    Funny they mention low vol market is hurting them, well they should learn to switch up their strategy. You can still make money in this lower vol situation, it just requires doing things differently. It took me some time to work out a new solution but it was doable.


    This week, volatility rose even as stocks rallied , an unusual juxtaposition that prompted some traders to speculate that the fund’s efforts to extricate itself were rippling through the market. Others noted that the CBOE Volatility Index readings, in the low double digits, have recently been so low as to make large upward moves more likely in the event of any unusual market action, some analysts say."

    Interesting it was these guys the cause of this.
     
    Last edited: Feb 25, 2017
    #55     Feb 25, 2017