Two elements compose the risk: move of the price * leverage 1% move up with 100 leverage being short equals wipe out; 25% move up with 4 leverage being short equals wipe out too.
It won't hurt to consult your attorney. It is quite possible that the SEC might find violations of securities laws as far as the actions of the broker. The bad thing which might absolve the broker is the POA which you executed allowing Optionseller.com to trade your account. Now, the broker can say that you gave authority to Optionseller.com to act in your behalf and they are not liable for Optionseller.com's trade decisions. The broker might be inclined to throw you a bone if there is a threat of a lawsuit, the outcome of which is uncertain. If you can get even part of the debit balance waived, it might not be much but, better than nothing!
I need to research further how the Midland account relates to the second FC Stone one. I don’t think FC Stone has self-directed IRA’s so that was why we had to set up a Midland account. We are calling Midland and FC Stone today for clarification.
From Reddit: longboarder12 there's a guy on twitter that posted a google doc of their positions. basically the main nat gas position was a ton of 12:1 call ratios and some short puts as well. when vol shot up over 11/8-9, even though the short calls remained otm their value got jacked way up. the hedge was the 1 long call for every 12 short...no delta hedging with the future from what i can tell, and even if there was i'm not sure how much it would've helped docs.google.com/spreadsheets/d/1-oj5UkqU0tMHrMnIEiuIYmTlxVWoU-VJqumykJ3IMUA/edit#gid=1356201715
Hi PJB1994, What was the official name for their CTA program? And another question? Typically CTA managed accounts get daily statements with all current positions. Were you getting them? Thanks, redduke
Probably accurate. He could have bailed the position at a big loss or he could continue to chase the dragon. He chose the latter. Now he has a big watch.
First he would have to meet a huge margin call. Then with a massive short natty futures position he’d have to post massive margin. I’m not probably right I’m definitely right; it’s the definition of a margin call. Amaranth, Neuderhoffer, LTCM , MF Global were all massive margin calls that couldn’t be met..