SEC Complaint Against 'Supertrader' Karen Looks Like Mini-Madoff
Her fund failed to report losses that could potentially reach 100 million realized. Initially she was an inspiration for retail like delta-neutral options trading. I did experimenting on TOS sim with the strangles strategy for a time and my opinion was the risk and leverage was just too high for risk of ruin i.e. like timing grabbing nickels in front of bulldozers. The lesson would seem to be, always be wary of strangles and other delta-neutral options spreads and those who profess to teach or promote them as "monthly income" options trading.
Yeah, I remember reading about her years ago from the Tastytrades interview and figured something was up. Leveraging (with portfolio margin no less) short option positions coupled with ridiculous and consistent returns filled the "suspect trading" criteria. Seems most of these big players do well with their given strategy until underlying market conditions change.
Agree with your conclusion 100%. Consistent money can't be safe money, no matter how much it gives that appearance.
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Karen The Supertrader | Options trading IQ
Take a look at the comment section.
First, take a look at the comment by "Actuary" who goes into detail about the risk and reward of this strategy, and that is followed E. Cunningham "If you donít understand how she did it you should really get out of this game!"
This represents the struggle between those who understand risk and reward versus those who are completely ignore the level of risk necessary to achieve their desired return. Every percentage point you want in terms of returns, an equivalent level of risk is necessary to achieve it. Do not get fascinated by returns only, investigate each method by examining the level of risk it took to get there.
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
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1 year ago
Karenís last name is Bruton.
She has made so much money and continues to amass such good returns that she is sharing her wealth through her charitable missions. Look up her name and you will find her website.
Her story is incredible and not for everyone.
I donít need to make 100ís of millionsÖiíd be happy doubling my account every few years so that I would not need to work for others any longer.
I love how humble and simple she is in her approach. But make no mistake, she is no dummy.
She knows how to manage her trades without letting emotions get in her way.
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