CostaKapo
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Outside funding. She is basically running a TOS hedge fund.
lloydbee
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As Tar and Costa said it was outside funding that massively grew her accounts.
I heard she WAS entering trades around the 56days to expiration but has since dropped that time frame basically in half. Also she isn't selling Verticals she is selling Naked which allows her to drop the protection cost allowing her to remain further OTM. It's no big deal what she is doing and certainly nothing special. It's a no brainer and any Options trader with half a brain and big capital would have figured out the same system.
I certainly don't see why she is labelled a Super Trader *shrugs* nothing super about her methodology that's for sure... but her capital sure would be nice. I think maybe most people would be impressed because they have been brainwashed into the old crap line of needing to sell 'x' amount of premium rather than taking the ultimate probability or Delta trade.
Super trader...pffft
lloydbee
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I just watched the Aug 14 video, I forgot that she was due for another Tasty visit but it's still the same thing selling a month and a half out naked... I am with her though on the $12 VIX being a horrible world and greatly miss the $35-45 VIX days where there was easy money to make.
I do wonder though with a $300M account putting $150M give or take into the markets just how tough that is but it's something I'll never have to worry about I guess. I do enjoy though trading small size and not worrying about moving the markets or having to help create liquidity to get fills. It's depressing enough when you place an order for 200+ contracts and they only fill 7 which has happened more than a couple of times.
Getting my $GOOGL on #supertrader )))
https://www.facebook.com/photo.php?fbid=672507952826412
( IDK why my images don't work... oh well.
I do wonder though with a $300M account putting $150M give or take into the markets just how tough that is but it's something I'll never have to worry about I guess. I do enjoy though trading small size and not worrying about moving the markets or having to help create liquidity to get fills. It's depressing enough when you place an order for 200+ contracts and they only fill 7 which has happened more than a couple of times.
Getting my $GOOGL on #supertrader )))
https://www.facebook.com/photo.php?fbid=672507952826412
( IDK why my images don't work... oh well.
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lloydbee
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she adjusts her losers depending on the markets as they hit 30 Delta
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fxstrategist
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karen supertrader video
It could be true, but she doesn't say exactly how she did it.
It could be true, but she doesn't say exactly how she did it.
lloydbee
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Yes she does, she sells Naked Singles, Strangles and Vertical (IC's)
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Doing this with any size is dangerous. If 1987 happens again, people who do this stuff will be wiped out. With unlimited risk trades, the trader could owe the broker more than the account liquidity, and be sued or garnished for the rest. In any case, there are better methods.
lloydbee
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I don't think necessarily that is true, those days are gone, for one trading would be holted. Position sizing would mean she might take a hit but she would hedge as well as roll her position.
Lloydbee, how do you know those days are gone? We just had a flash crash. And a CME crash. Maybe 1987 will never happen again, but we do not truly know that. I am not out to be confrontational or to prove anyone right or wrong, only to point out to others on this forum who may be contemplating doing this that there are better ways to trade than selling naked, far OTM options. There is too much risk in them for the return. The woman in question is trading 50% to 70% of her account at this, on portfolio margin (which makes it even worse).
lloydbee
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Hey drcha, feel free to express your point of view, that's what these forums are all about I'm mature enough to not take your comment or anyone else's personally.
"those days are gone" = of large down days because now there are measure in place since the flash crash of May 6th... BUT not only that but her style of trading would survive a May 6th move (8.6%) because she is further OTM 12%+ AND she makes on the fly assessments as we all should and only an inexperienced trader would panic trade. You are not an inexperienced trader when you have 300Million in your account so you would know better and also take advantage of such situations. Crashes or dips like that are a HUGE opportunity to make some fast gains for actual 'traders'.
If people are contemplating her style of trading of course they'd best know what they are doing, NOBODY should be selling naked unless they have a large account, appropriately sized positions and know what they are doing, if not then well too bad if a move like this blows up their account, it's all part of the learning curve. You are so true in that there is safer ways to trade, with the simple addition of adding a long leg as protection.
Like I agreed, there are better ways than selling naked for some people but not everyone shares yours or mine risk tolerance and perhaps they can handle the risk involved with being naked saving them the cost of protection. I 100% disagree with the later part though. This is the typical mindset of people who either do not understand probability or do not trade probability but it is by no means too risky for some people and is in fact the total opposite.
All this said though, I just don't see her as a Super Trader but legit, sure why not, anyone can do what she does.
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CostaKapo
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We also don't know if these positions are completely naked. If she is hedging her shorts in the form of a bull put spread then she will have a capped loss.
There are way too many unknowns around her to say "She will be wiped out by a flash crash." For all we know she could only have 25% of the capital in options at any given time.
Edit: I am going to hedge this post real quick - I have not watched all her videos so if youre privy to something I haven't seen then I would like to see it. From what I have seen she has never mentioned being completely naked with large option positions. She seems to hedge every position in the form of a spread or IC
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lloydbee
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She trades Naked Singles, I have said this before and no she does not do spreads and definitely no IC's if you want to get technical you could say she trades Strangles but that is not actually true as each trade is placed as a Single and her Puts-Call trades are placed and looked at as two separate trades as if the other does not exist.
CostaKapo
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Where does she say this? Full disclosure Ive only seen the TT interviews so I am no expert on her. I just haven't seen anything saying she only trades naked.
lloydbee
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I think maybe try this one https://www.tastytrade.com/tt/shows/must-see-tt/episodes/9237?locale=en-US
Or as she puts it "nekkid"
I guess you could look it like a ratio strangle. Where the puts are much further OTM than the calls....As I recall she will sells 2 puts out at about .17 deltas and sell one call around .30 deltas. Then manages each position separately... constantly maintaining the delta ratio with rolls and new positions.
CostaKapo
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In the interest of the original question posed - I know some people like looking at this stuff: http://www.secinfo.com/d1E9A7.ne.htm
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