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; There is a real easy way to test her method. Just sell a SPY strangle with say, APR2 155Px10 and ...

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Old Apr 2, 2013, 5:56pm   #21
 
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Re: IS this Karen Supertrader story legit?

There is a real easy way to test her method. Just sell a SPY strangle with say, APR2 155Px10 and 159Cx12 for $824 less comm. Close to even Deltas outside of 1SD so 80% chance of success. Adjust it as the next 11 days goes by if necessary and enjoy the fact that there is only a 10% chance of loss on either end...
And, of course we know it can't be in both places at once so makes it nicer. Hard to know how much adjustments help, just keep the Deltas neutral more or less...

First one to do this and document same gets a free six pak of Black Butte Porter from me...

Regards,

Jerry in Oregon

PS. I was born a skeptic, but her story has a ring of truth about it...
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Old Apr 2, 2013, 10:23pm   #22
 
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Re: IS this Karen Supertrader story legit?

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Originally Posted by jerry2dt View Post
There is a real easy way to test her method. Just sell a SPY strangle with say, APR2 155Px10 and 159Cx12 for $824 less comm. Close to even Deltas outside of 1SD so 80% chance of success. Adjust it as the next 11 days goes by if necessary and enjoy the fact that there is only a 10% chance of loss on either end...
And, of course we know it can't be in both places at once so makes it nicer. Hard to know how much adjustments help, just keep the Deltas neutral more or less...

First one to do this and document same gets a free six pak of Black Butte Porter from me...

Regards,

Jerry in Oregon

PS. I was born a skeptic, but her story has a ring of truth about it...
No takers? No simulators out there? TOS paper trading? Nobody like beer???

Jerry
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Old Apr 29, 2013, 1:39am   #23
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Re: IS this Karen Supertrader story legit?

I don't drink beer no, but thanks. But I've been playing with the idea on sim for three months now. If you guys haven't seen it yet, there is a follow up segment on tastytrade and now posted on youtube where Karen's account is now $160 million plus. I would assume it's the rich elite piling on to her fund.

So far, the total p/l is about +4.4% starting with 100 million similar to what Karen said in her Tastytrade segment update. Had a big drawdown to 1% a month ago but held on and it balanced back. Now pushing the high side again. Another black swan move could certainly wipe out all the gains. I also tried the NDX but it was too hard so I gave up on it. I found the only way to keep it profitable in sim is when closing a leg with a # of contracts is to make sure it's limit bought all the way on the bid average spread as TOS doesn't seem to do it automatically. Have no way of knowing if it would close that easily in real money, at hundreds of contracts at a time.

At first I tried adjusting by full strangles, then now at 53 days out, putting the whole caboodle on, then minutely adding or removing puts or calls to adjust. Mostly haphazard as I have no idea how Karen actually precisely does this. But she did mention adjusting by single short calls or short puts.

I would think one would have to already be a billionaire to be comfortable doing this! Losing or gaining hundreds of k's in a day is just to much for a mere middle-class mortal imo (well maybe Ghadafi's kids with their mansions made of gold and stuffed walls of American dollars..) , not to mention a black swan millions wipeout. Anyways, it's been a fun game so far.
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Last edited by krylite; Apr 29, 2013 at 1:58am.
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Old Apr 29, 2013, 8:50pm   #24
 
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Re: IS this Karen Supertrader story legit?

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Originally Posted by krylite View Post
I don't drink beer no, but thanks. But I've been playing with the idea on sim for three months now. If you guys haven't seen it yet, there is a follow up segment on tastytrade and now posted on youtube where Karen's account is now $160 million plus. I would assume it's the rich elite piling on to her fund.

So far, the total p/l is about +4.4% starting with 100 million similar to what Karen said in her Tastytrade segment update. Had a big drawdown to 1% a month ago but held on and it balanced back. Now pushing the high side again. Another black swan move could certainly wipe out all the gains. I also tried the NDX but it was too hard so I gave up on it. I found the only way to keep it profitable in sim is when closing a leg with a # of contracts is to make sure it's limit bought all the way on the bid average spread as TOS doesn't seem to do it automatically. Have no way of knowing if it would close that easily in real money, at hundreds of contracts at a time.

At first I tried adjusting by full strangles, then now at 53 days out, putting the whole caboodle on, then minutely adding or removing puts or calls to adjust. Mostly haphazard as I have no idea how Karen actually precisely does this. But she did mention adjusting by single short calls or short puts.

I would think one would have to already be a billionaire to be comfortable doing this! Losing or gaining hundreds of k's in a day is just to much for a mere middle-class mortal imo (well maybe Ghadafi's kids with their mansions made of gold and stuffed walls of American dollars..) , not to mention a black swan millions wipeout. Anyways, it's been a fun game so far.
I have been experimenting with short strangles in real time trades and currently have had one on for the past 10 days, expiring next Fri., but may take it off sooner. The legs are 2 SD's wide now because I took every chance to push them out, taking profits and losses as necessary. This am one on the put side was too far out, little delta in it so took that profit and put another in to even out the D's. Also, just one SD at 68% does not give enough protection when 1 out of 15 trades blows one up.

I note that Karen has 4 traders and herself watching every tik and in my experience so far feel one must attempt the same. I note she trades the SPX and suspect she uses a very lo cost broker. Just one contract on it is for 100x1595=$159K. She also may have had a run of very nice luck when first selling strangles, and so had a bunch of capital. Maybe she'll write a book and explain everything in detail.

Best to all,

Jerry
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Old Apr 30, 2013, 1:16pm   #25
 
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Re: IS this Karen Supertrader story legit?

Quote:
Originally Posted by jerry2dt View Post
. . . sell a SPY strangle with say, APR2 155Px10 and 159Cx12 for $824 less comm. Close to even Deltas outside of 1SD so 80% chance of success. Adjust it as the next 11 days goes by if necessary and enjoy the fact that there is only a 10% chance of loss on either end...
. . .
And watch your position get blown out of the water when the market gaps up/down on a black swan.
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Old May 1, 2013, 2:34pm   #26
 
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Re: IS this Karen Supertrader story legit?

Trading undefined risk index options positions is just asking for trouble imo. Its a matter of time before there is another hft-generated flash crash or other such random event which would obliterate the P&L of most index strangles.
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Old May 27, 2013, 5:53pm   #27
 
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Re: IS this Karen Supertrader story legit?

Based on her trading methodology, May 2013 would seem to have been a really bad month for Karen the Supertrader. She acknowledged in one of her interviews that market grind-ups were more difficult to deal with than declines. An example of a trade she may have done would have been to sell the Jun Spx 1685/1705 call spread on 4/25 for $0.62. The 1685 had a delta of 5 and an itm probability of 5.1%. By 5/15, the 1685 had a delta of 30 and itm of 29%, her stated threshold to adjust, and the spread was then $5.00. To attempt to recoup this loss, she would have had to roll the spread up, or out to Jul, but would have had to increase the position size by 5-8 times which would seemingly require significant leverage and added significant risk. Even if the original trade was an iron condor and she was able to roll the put side up to generate incremental profits, the loss on the call side would likely have still overwhelmed the position.
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Old Jul 2, 2013, 9:35am   #28
 
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Re: IS this Karen Supertrader story legit?

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Originally Posted by MACLondon View Post


Anyone have any thoughts on this woman? I smell a rat....
Her rate of return for the past 3 years was a compounding 40-45% return. Her account size may have started with 100k as she was learning the game, but was soon ramped up into the millions after her first year of actually doing it for a living. If she's telling the truth, i would say i doubt she's lying because the guy interviewing her, Tom Sosnoff, caught notice of her while watching her trades within the brokerage. Seeing her risk profile and her success.
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Old Jul 2, 2013, 10:24am   #29
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Re: IS this Karen Supertrader story legit?

Whats her proper name?
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Old Jul 2, 2013, 10:32am   #30
 
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Re: IS this Karen Supertrader story legit?

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Whats her proper name?
Karen Bruton, here is her foundation's link. Our Team > About JHI
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