Karen the "Supertrader"

LOL!!!

I keep hearing that sellers of far out of the money opts will eventually blow up. Well, if you only do the major indices, you can protect yourself with futures contracts after hours, no?

 

This is so incredibly f*cking stupid that I am almost speechless. Almost.

 

I couldn't agree with you more

 

Why? she seems to be making modest returns probably averaging less than 20% a year.

Now any retail trader on elite trader should be able to emulate her results except no one wants to make just 20% here, because 20% on a small 10K account or a 50K account or even a 250K one isnt a lot of money.

Most retail traders want to make 100% or 200% or more and end up making a loss by over trading.

 

How is delta-hedging overnight with futures going to protect you? To protect from negative convexity you need positive convexity, there is no other way.

I doubt her prime broker will take her down to earth nature into account when front ATM vols go to 45 and spot drops 15% in a week.

 

She's selling naked strangles, not ICs.

 

This is the strongest reason why I tend to believe the story. In actuality though, it's not a reason at all. Some of the biggest con artists in Wall Street history have been trusted by the masses until their mugs ended up on "American Greed" (CNBC television series).

 

I have a problem. I started watching it and here it goes:

He: "Basicly people are throwing money at you right?"

She: Yes...

Then a little further she sais:

She: "Everybody knows how hard it is raising money, it's really hard for me to raise money"

Eugh, what is it now? Easy or Hard ?

I stopped watching after I heard that.

 

I found there to be many details missing--enough so that I question whether we have any idea what the "strategy" is (or if there is one, or if the story is real--hence my reason for starting this thread). For example, when the position gets pressured she simply claims to roll to whatever strike necessary to "make it whole" again. This is not always possible. In a market downturn like 2008, there are no such strikes.

 

Imagine seeing one night on the evening news Tom Sosnoff being carried out in shackles for alleged fraud. Could such a thing ever possibly happen given the history of trust betrayal on Wall Street?