I didn't wish this for Vic. The only trade I know of was the Mar08 par puts. I believe these were sold with SPX >1500. When, and at what price, I can't say.
Rowshan, you're an asshole plain and simple. Marketsurfer, no one is twisting what you said. Its there in print for everyone to read. Simply put, you can't take the heat and you turn into a whining little child Nitro, no one will discuss the real prob because they don't have the chops. As far as I can see, few here with professional training. I am pretty sure he didn't just short vol. That would be stupid beyond belief. Once again, you can see what a fucking zoo this place has become. Nitro I would be glad to discuss the real issues over at Wilmott. bye
Please, I am not twisting your comments. However, you may have written them badly. But you do imply that he only goes by Dr. or only should go by Dr. If there is one thing I've learned in life, is that people who prefer the title Dr. need to have a reality check.
Now Vic is selling risk-reversals? He's on the record as never shorting equity markets. HTF would you miss the hedge on your fantasy risk-reversal? He missed grammar school math class? Pray tell, what is the correct hedge w.r.t. to selling 5 deltas with atm-strips at 10%? I'd love to hear this. Please no parroting of 7th moments, unless you'd like to pose an example of a seventh-moment equity op-risk. Please do. A simple hedge, please.
we're on the same page, neither of us, and hopefully no one else here, is taking delight in the demise of another.
He could put on any number of spreads, synthetic or otherwise. RRs, put spreads, etc are perfectly reasonable positions to have traded. I have no idea what he is on record for, or not. If all he did was sell VIX, then similar arguments apply to that position as well. I don't know. He missed some hedge somehow. If he was betting on the direction of vol with no hedge, same crime. From his point of view, he probably thinks he was hit by at least a 6 std event. nitro
I think this is standard stuff on boards. Heck, it is standard stuff in real life too. Let me give you an example. On the train to work, I have about an hour and fifteen minute ride. I would say that 90% of the people on the train are reading gossip newspapers. Wilmott is a great resource. I barely have time to post here, let alone there. This place has always been a zoo. FWIW, the way to reduce that is not to placate bad online behavior. You need thick skin to move on when someone is being disrespectful and let them have the last word. We all have different skill levels, different knowledge. IMO the more experienced traders job on forums like this should be to dispel myth. nitro
IMO here is what we should be interested in: 0) Were his investors aware of the risk he was exposing them too? 1) What was VN position 2) Why did he think that was a good position. What analysis led him to the position. 3) If he had to do it over again, and was forced to put on the same position, how would he have protected himself? If the protection made the trade not worthwhile, does that mean that his trading style is essentially a time bomb, or is VN just cursed? nitro
Another question I would be asking: What was the implied distribution of VNs position? Clearly he underestimated the odds of an extreme return, and therefore bought no wings? Was he playing what he believed was too high an implied skew? The guessing can go on forever. Here is a [delta] hedged short vol position that is simple. Short OTM puts and short the underlying in the right ratio. This could easily blow up if done wrong with size. It is hard to believe that the man simply shorted VIX with VIX at 10 or 12. nitro