What if Karen the Super Trader had an effective hedge?

Discussion in 'Trading' started by Sweet Bobby, Sep 1, 2018.

  1. Why did I ever doubt my girl, Karen. Before I start I encourage all the ugly comments that are heading my way. Gosh do I miss Loogie calling me Sweet and Sour Bobby! Let him back on this forum!

    So many of you called her a crook and a fraud. In the back of my mind, I knew she wasn’t and I knew she would be back. Her SEC filing as of the beginning of 2018 states that she is managing in excess of $100,000,000.

    I think why so many people here love to criticize her is nothing but pure jealousy. She outraded us all! Are you upset because she’s a woman? Are you upset because she’s been trading fewer years than you? It doesn’t matter. She is more successful than 99% of the goons on this forum. Get over it.

    There are those that speculate that she lost over $90,000,000 in August 2015. If so that would have been a drawdown of about 1/3 of her account. There’s no doubt that if she did lose, she has now fully recovered and is printing money once again. (Cue your pennies in front of the steamroller comments. You just can’t help yourself.)

    I tested her strategy with a combo of tastytrade strategy at length in 2016 with a 71% annualized return, though admittedly I didn’t start the test until June of that year. Somehow I got away from her strategy and morphed I to options on commodity futures because it in my mind minimized the black swan. If only there was a way to hedge the Black Swan and turn it into a Dirty Duck!

    Karen hates selling calls. I have 3 naked ES calls on right now and I understand her hatred. Low credits and constantly being tested in this runaway market. But what if she didn’t need to sell calls? What if they were totally unnecessary?

    Karen! I think I’ve discovered that you don’t need to sell calls at all! If Karen had a flaw in her strategy it was this - she didn’t keep track of her deltas. I am of the belief that she should have maintained negative deltas at all times. But I can’t give her advice - I’ve never generated profits in excess of $50 million.

    Is there a better way to hedge the overall portfolio? Is there a better way to generate negative deltas rather than selling calls? Should she hedge the portfolio buy buying out of the money puts (teenies)?

    I dare say not a soul on this forum knows the answer to this question, and if you do, I bet you’ll not share it with the “class.” I THINK I know the answer. I’m not sure that I’m ready to share it at this point. But it’s a conversation worth having.

    Right now I have on a total of 5 naked short puts and I have little to no risk to the downside! Bobby, you’re going to blow out your account! I fooled so many of you on this before! I told you I was blown away and you bought it hook line and sinker. You lectured me on what a fool I was! I remember your hurtful and insensitive comments. The moderators even shut down my thread! Why? Did they not like me tricking you naysayers? Did they think since the account blew up that it was no longer necessary? I’m not sure and at this point I don’t care. What scares you inspires me!

    Most of you would never sell 5 naked puts in the ES. Put here I am staring at them. If the market tanks Tuesday and drops 20% with a 40 point increase in volatility, I’m down a very manageable sum in regard to my overall net liq. Say I’m wrong on the vol increase and Villa goes up 50 points! I lose less money! If volatility spikes 52 points I start making money! If volatility were to spike 60 points (is it even possible?), then I make enough cash to buy a used Rolex. Ha!

    Five naked puts and no fear to the downside? A good nights sleep each night? The assurance that ANY black swan event is only a dirty duck? Hedge in place, how do I make money? Well you have to have an income trade. In Karen’s world that involves the sale of puts and calls. Karen, if you or your team happen to read this, please contact me.

    I know how you can sell puts, hedge your portfolio, AND NEVER sell a call again! If YOU had to give Karen advice, what would YOU tell her? Hopefully, we can have a fruitful dialogue on the subject, though I’m skeptical. I know how vicious some of you can be.

    If restraint and true engagement are utilized in the responses, I have no problem sharing my discoveries. I’m an open book. I know that even if I share every step with you, the overwhelming majority of you will never trade my method because of your fear. It’s okay to be afraid. It is not okay to allow fear to cripple your decision making.

    I’ve been very busy trading my little family and friends account. I thought everyone would be beating the door down wanting in on the fund. Not so! Only one high school friend put a little cash in. He will be rewarded beyond measure! Those who were approached and didn’t believe? Well, I’ll pull a John McCain on their ass! You are not invited into the fund ever again. Perry? Perhaps. But, life is too short to surround yourself with negative people.

    Life is good! I just adopted my fourth child and we hope to have our final child adopted by the end of the year. We will no longer be foster parents as we will have adopted 4 of the 16 children that we have fostered! Our fifth child was adopted from Guatemala. I just bought a 12 passenger prison van to haul around our 7 member family!

    I just completed the first year of my PhD program in business. This semester I will be consumed with inferential statistics and I hope it will help with my trading. That’s the Sweet Bobby update. Happy Trading!

    P.S. - Please let Loogie back in. Things have become quite mundane without him!
     
    Flynrider and cafeole like this.
  2. optaiwan

    optaiwan

    Selling naked puts is very dangerous, and your strategy cannot make you sleep well and wake up with black swan immunized. sorry, I am from Taiwan and English is now my home language. but again here in Asia, selling naked puts is a sure way to the graveyard too. many "Karens" in my hometown have gone broken suddenly on Feb. 6 of 2018 when some Taiwan index calls soared by 10000 times with implied vol nearly 200% (when the market was DOWN by 3%). So, you are right that people in Asia should not sell CALLS, which may be more dangerous than puts when the shit hits the fan and when the market depth collapsed. In Taiwan (ranking Top 5 index option trading volume in the globe), fifty percent of the volume is from retail players and they all faced the SAME forced liquidation rule set up by the futures exchange. This caused them to be forced into facing A single exit door when the theater is falsified being called fired. sometimes a south-bound train can hit a north-bound trader.

    don't shit like elephants and eat like chicken. go buy BABA and hold it for ten years. your broker may not be happy, but your family will sure be happier.
     
    Last edited: Sep 1, 2018
    niko79542 likes this.
  3. newwurldmn

    newwurldmn

    Congrats on adopting the children. That is God’s work.
     
    cafeole and Sweet Bobby like this.
  4. This is damaging. I've seen too many kids who grew up in a loveless home with parents believing they do "god's work". Adopting children is loving parents' work, and nothing less.
     


  5. He should get combat pay.

    :cool:
     
  6. Trust me! We love our kids!
     
    sle likes this.
  7. My sincere apologies, I do not mean to imply otherwise. And congratulations.
     
    Sweet Bobby likes this.
  8. MarkBrown

    MarkBrown

    there are very few kan't lose methods to trade, selling options is one of them. "if" you know what you're doing. to do so you need about 90% capital reserves to "never lose" and ice water in your veins would be an asset also until you get use to the heat. m
     
  9. rwnomad

    rwnomad

    I wish you all the best. I have 2 step children and they were all I could handle, perhaps more than I could handle at times. Don't let your enormous ego interfere with your trading.
     
  10. Jo Jo’s adoption day! I think he feels pretty little bed! Little guy has been with us since he was two. Cool thing is, we maintain a wonderful relationship with his birth mom, so she remains in his life. She can’t care for him on her own. So he has mama, daddy, and mom!
     
    #10     Sep 1, 2018
    SimpleMeLike, sle and TreeFrogTrader like this.