IS this Karen Supertrader story legit?

This is a discussion on IS this Karen Supertrader story legit? within the Futures & Options forums, part of the Markets category; Looks like she is involved in some sort of managed fund, that explains all the attention seeking press. BASIC Details...

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Old Jul 2, 2013, 9:37am   #31
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Re: IS this Karen Supertrader story legit?

Looks like she is involved in some sort of managed fund, that explains all the attention seeking press.

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Old Jul 2, 2013, 9:40am   #32
 
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Re: IS this Karen Supertrader story legit?

She ended up becoming a fund as more found her story. Her original start was the educational seminars and moonlighting as a trader. Then she quit and started with 100k and made 50k her first year. Her neighbor and a few friends gathered to 700k+ and then its been building ever since. But the press comes from her not even being in the industry and producing returns as she has, etc...
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Old Jul 3, 2013, 1:23pm   #33
 
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Re: IS this Karen Supertrader story legit?

Watched the video above last night, came accross as 110% legit to me.
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Old Jul 11, 2013, 6:04pm   #34
 
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Re: IS this Karen Supertrader story legit?

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Originally Posted by MACLondon View Post
Agreed. Also interesting to see the classic signs of: No performance published, No chart, no further local press write up....etc etc...

Because i guess if the guy next door made 41million USD doing that in three years then went to the national press then nobody locally would be interested etc etc....nobody would have written much about it. She also makes some mistakes and then corrects herself in her video....she doesn't see sure of her strat and speak very opaquely. I guess we'll see if anybody else chimes in...
Kare is actually a legit story. She started with $100,000 of her own money and proved to friends and investors that she can trade. So going to $41 million actually was a large investment from some rich people. With that said, she trades about 2 to 3 standard deviations at any one time. Is there premium???? Depends on how you look at it. 50% of her portfolio is always in the market at any one time. By placing MASSIVE trades, you can pick up a decent premium. She gets so far out in her trades that the probability of being ITM is probably around 3% to 4% and her breakeven is at 5%. It's all a numbers game really. If the /ES is trading around 1635 and she sells naked PUTS at 1395 to 1404 somewhere in that range, she can use $30,000 of buying power to pick up enough premium to giver her $3,000 in ROC (assuming the account size was $100,000, but she plays with a $100,000,000 portfolio). That's 30% of capital used and she uses 50% at any one time.
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Old Jul 24, 2013, 4:33pm   #35
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Re: IS this Karen Supertrader story legit?

I must say I use Bollingers with the pipdaq setups and they work a treat so while I don't know this lady I wouldn't be surprised if she was legit...
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Old Sep 16, 2013, 5:33pm   #36
 
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The ins and outs of her strategies may be a bit beyond me at the present but I'll just say this; I watched several minutes of this video, and also one where a gentleman named Peter Schultz at Tradingpub uses her as some kind of "reference" to suggest that this can work for anyone, and all through this, no one will mention her full name. We dont really know who this person actually is. This guy even makes the point that he's protecting her privacy. If she wanted to remain private, would she be doing this "interview"? You cant earn a bazzilion dollars in a few years and remain anonymous in this, or any other country. I just dont think it's going to happen.

Last edited by gavspen; Sep 16, 2013 at 5:40pm.
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Old Oct 20, 2013, 4:35pm   #37
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Is Karen legit. I certainly believe she is, since I understand the strategy she is using: strangles at around 5%-10% Prob of expiring ITM; in other words, the probability of profit is around 84% (or 1 std deviation).

In addition, she is very aggressive risking 50%-70% of her account on trade positions (which overlap); and she will consider rolling a leg if it gets above 30 delta. I personally would not risk more than 25% of the account, however.

There are other posts interested in knowing if consistent income can be made in trading. With options, you can achieve consistent income far more easily than trading equities, futures, etc. which are directional trades (and therefore have a prob of profit of 50% at best).

How do I know? Because I am using options (similar to Karen) to make consistent income on a Weekly basis. It can be done.
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Old Oct 20, 2013, 6:53pm   #38
 
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Yes, and I do those trades also. It works just fine until the underlying gaps beyond the one or two deviations and wipes out what you've gained in the past 20 trades. A 5% chance is after all, a 1 in 20 probability. It has happened to me in the past year. Gotta watch for those outliers on the bell curve..

I note most pros always have protection in the form of a buy further out. That does no good after the fact, of course...
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Old Oct 20, 2013, 11:12pm   #39
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Hi
i agree that karen could be genuine. i have been trading options for several years and i believe that options are unique to other investments such as forex and spreadbetting as you can also sell options aswell as buy them. this seems to be karen's secret "selling premium". they say 90% of option buyers lose. we can then become sellers with a 90% chance of winning! I am learning new strategies but i have had 85% success selling puts.
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Old Oct 20, 2013, 11:18pm   #40
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Hi
I am interested in sharing options strategies. I have found success selling puts. not as exciting as buying options but it does allow you to achieve consistent returns. I have recently learned some new strategies involving "selling premium" and i am seeking one that gives larger returns than put selling.
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Old Oct 21, 2013, 1:33am   #41
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Quote:
Originally Posted by jerry2dt View Post
Yes, and I do those trades also. It works just fine until the underlying gaps beyond the one or two deviations and wipes out what you've gained in the past 20 trades. A 5% chance is after all, a 1 in 20 probability. It has happened to me in the past year. Gotta watch for those outliers on the bell curve..

I note most pros always have protection in the form of a buy further out. That does no good after the fact, of course...
If you keep your position size small, you will not get wiped out. I trade the SPX and while I've had positions challenged, in most cases (for the Weekly SPX) it expires OTM. The one occasion where it did not (over 5 yrs), I lost a small amount.

Besides, using the Expected Move (and not the Option Chain skew), you can get Prob of Profit of over 95%. The premium is good when using a wide spread (I use $25). With that kind of spread, the probability of a max loss is less than 1% (typically less than 0.1%).
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Old Oct 21, 2013, 1:43am   #42
 
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Love the % figures being thrown around here without any specifics. Don't believe them of course.
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Old Oct 21, 2013, 2:07am   #43
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Love the % figures being thrown around here without any specifics. Don't believe them of course.
The specifics, Shakone, is the Probability model which provides the std dev (and the percentages) based on IV. You are, of course, free to believe what ever you want.
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Old Oct 21, 2013, 2:13am   #44
 
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Quote:
Originally Posted by rb107 View Post
The specifics, Shakone, is the Probability model which provides the std dev (and the percentages) based on IV. You are, of course, free to believe what ever you want.
Are you talking about standard deviations from a mean under a normal distribution, and the probability of falling within those deviations?
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Old Oct 21, 2013, 2:19am   #45
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Originally Posted by Shakone View Post
Are you talking about standard deviations from a mean under a normal distribution, and the probability of falling within those deviations?
Yes I am. And based on the percentage daily change in the SPX (specifically), the price action is predominantly random. This is always another point of controversy amongst traders.
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