Don't give yourself too much credit, unclebond555. The only way you will ever know that returns aren't fake is by scrutinizing authentic brokerage records. It's almost impossible to make that happen unless they belong to somebody you know. I think this is what makes Wall Street fraud so intractable. Furthermore, you also have no idea how much money Tom Sosnoff has. Watch the 30 for 30 documentary "Broke" to see what happens to so many apparent multi-millionaires.
Down to earth or downright ignorant? My weakest reason for suspecting the whole story is just because she hardly seems fluent in her communication or an expert with regard to options trading. I say this is a weak reason because maybe she is shy, maybe she has "stagefright" (she is on camera, after all), or maybe she was sick that day. It also does not preclude her from being highly intelligent. I do think the cliche marketing line "you don't have to be a rocket scientist to execute this strategy" is ripe for fraud because it encourages people without critical thinking skills to buy into unproven (or fradulently proven) programs without understanding the true risk.
I totally agree. It's a great story. It's like "porn for traders." Most of us (including myself) could only dream of making $105M selling naked strangles. The presentation makes it sound easy and makes it sound like one (seemingly, as described in my last post) doesn't have to be overly educated to do it. It's a story that will get people talking. My surprise was that while I saw people talking about the story, what I did not see was anyone questioning its authenticity.
There is nothing fake about her returns .. Tom is already a multi millionaire and has better ways to make money than coming up with a fake trader who could easily be exposed by someone that knows her if she is fake . this is a carbon copy of cramer/dykstra. cramer had millions yet endorsed dykstra who had a similar strategy except his was doubling down to infinity - in both cases they both have an inability to admit they are R-O-N-G in a trade.
DrMark, I beg to differ with you on the subject of market ignorance. I believe one of the biggest problems in trading is "too much": There is too much information out there. There is too many trading systems to choose from. There is too many methodologies of trading. There is to many theories for every trading concept. There is too many indicators and gadgets. There is too many supposed Guru's who have the answer. All of the above leaves a potential trader (and many proclaimed traders)....confused...bewildered....not knowing which method or trade system, or indicator...do I apply to today's market situation. Therefore they fail because they don't pull the trigger on the trade. Even if the do pull the trigger, there is so many choices and they will probably make the wrong choice. Any of this sound familar to experienced traders? If you say no, your either a rare individual who has found your niche in trading, or in denial like most. I say all of the above in regards to your comment about Karen being potentially ignorant sounding. Anyone could make consistent money in the market year after year and only know one thing.....one method....one trade system. They could be totally ignorant and naive to the market, but if they knew just "one proven thing" they learned from someone with significant knowledge and proven history, they could succeed. Jeff
If she tried to strangle me naked I would straddle her But seriously did she say she never uses the outright? The term naked strangle seems ambiguous to me because it isn't naked it has a corresponding leg. If by naked they mean never in the underlying then she is retarded. It would save her a lot of transactions if when the price moves to her extreme parameters she went with it using the underlying. I have never traded the actual SPX nor it's options because I'm just a peon but how can she unwind huge far out positions efficiently? I sell directional strangles on the CL and have a hard time getting filled with just 4 or contracts. I watched the first little bit of it and she said they are very active. When I sell strangles I pretty much do nothing and let the trade work unless vol picks up. If they are so wide what is there to do?
I have watched both videos about a half dozen times. Here's what I got out of it: She says that initially she sells either naked puts, "or" naked calls and then just watches the "Probability Indicator" on the TOS software. She starts out initially with a probability of that put finishing In the Money by 5%. As time goes by, if the market is moving down and the probability indicator says that put strike she sold now has a 30% probability of finishing ITM, she balances the position by selling calls, or more further out puts, or both. Whatever it takes to bring the equation back into balance, "because once she gets a credit, she ain't giving it back." She initially starts off 50% invested in her account, but if things get in trouble she will use 70-80% of her account to make things whole. To me, this could all be true, who knows for sure, but I would have to say that this is a scary ass way to trade with a $195mm account. I don't see sound money management and I don't believe she's been tested enough with a severe downturn. As far as being tested by fire goes, the video only talks about the flash crash in 2010 with the Dow suddenly dropped 1,000 points. This leads me to believe that her current trade method may not have been in effect in 2008-2009 (SPX 666). They are vague about anything prior to 2010, but she did mention that during the flash crash of 2010, she considered learning Spanish and heading for Mexico, but somehow she worked her way out of trouble. Jeff
Humility is a great thing in the market, and in life. I don't know a damn thing about the markets or life. Keep it simple as possible. The pursuit of perfect knowledge is a fool's errand.
This has BS written all over it . Itâs a front to get people to buy into the Tasty Trade web site subscription. Come on guys donât be so gullible.
What is the difference? Both are bets on overpriced implied distribution and both are going to suffer in extreme market environments.