Trader turns $500 into $300,000 over weekend

Discussion in 'General' started by frankmatthews, Dec 7, 2015.

  1. frankmatthews

    frankmatthews

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    Jesus, where's the SEC? Part of me hopes this was just some trader who got lucky.


    http://www.zerohedge.com/news/2015-12-07/how-one-lucky-options-trader-made-60000-return-over-weekend
     
    Last edited: Dec 7, 2015
  2. rodrigofresh

    rodrigofresh

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    the odds are astronomical 
     
  3. johnnyredstorm

    johnnyredstorm

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    I mean, yeah maybe he knew something, but it doesn't necessarily have to be the case. It's just a $500 bet, if the stock moved it's traditional ATR he would've doubled his money regardless. I'm gonna lean on being naive and saying he just got lucky.
     
  4. nazdrowie

    nazdrowie

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    who even has $500 anymore
     
  5. HEATHEN

    HEATHEN

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    Hey, I mean he took his shot and hit a game winner.

    He's probably done this before and lost, finally paid off this time.


    He must be a Kobe fan. :smokin

    #Mamba
     
  6. gwap

    gwap

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    You must be from ohio
     
  7. noskey

    noskey

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    Well damb. Good for him :pimp: SEC should just let him cook.
     
  8. johnnyredstorm

    johnnyredstorm

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    i think they honestly will. it's just a lottery ticket trade that is reasonable. stock pops $3 his options could double. just because the stars lined up doesn't mean he necessarily had to have intentions of making more than a quick double.
     
  9. EddieDoyers

    EddieDoyers formerly eddiengambino

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    Congrats to man. Too bad he's going to have to pay some taxes on it :lol:
     
  10. frankmatthews

    frankmatthews

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    I tend to agree, $500 is peanuts but that doesn't mean he didn't hear some whipsers. These options expire Friday and the underlying was 20% away from being ITM. He wasnt gonna double his money, they were gonna expire worthless in a week. Either he knew something or he doesn't know anything.
     
  11. johnnyredstorm

    johnnyredstorm

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    he doesn't need to be ITM if the stock popped $3 today, options still have extrinsic value that he could've cashed out on. finding the liquidity to exit is another argument however.
     
    Last edited: Dec 7, 2015
  12. dman14

    dman14

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    i was waiting for keurig to bottom out |I
     
  13. cguy610

    cguy610

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    Definitely Insider information. The trader only put $500 into it to make it seem like it was a lucky gamble.
     
  14. frankmatthews

    frankmatthews

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    Yeah I get that, haven't ran the numbers but I highly doubt a $3 pop would have made much difference given the time and price. Any extrinsic value based on price would have been eaten up in time decay by the end of the day. A $10+ pop maybe cause that will add some volatility to the price. That would have been a terrible trade if that's really what he was dOing.
     
  15. HEATHEN

    HEATHEN

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    What kind of logic is this? :lol:
     
  16. johnnyredstorm

    johnnyredstorm

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    time decay really isn't an issue on mondays, trust me i day trade weeklies :lol: the issue would've been the spread widening/getting filled. it's def a bad strategy, but there are degenerates out there who do this.

    if it was a big institution/trader they would've just bought stock outright and hedged it with some puts.
     
    Last edited: Dec 7, 2015
  17. frankmatthews

    frankmatthews

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    Do you have access to what the greeks were on friday? I'm really curious if there was an actual strategy to this trade.

    Those calls could have been a short hedge themselves.
     
    Last edited: Dec 7, 2015
  18. johnnyredstorm

    johnnyredstorm

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    Hmm you know ThinkOrSwim probably has them stored in their data but Idk how to use it outside of just basic charting :lol: I can ask someone though. Yeah a short hedge is even more likely when you think about how cheap the option/otm was.
     
  19. cguy610

    cguy610

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    It's "don't get caught" logic.
     
  20. Mark Antony

    Mark Antony

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    Yeah i'd think the opposite, i know it's a sure thing, i'm betting more than that.