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According to this OptionSellers.com website, it took $500,000 minimum to open an account. Times 300 accounts means he was trading at least $150 million.
In my opinion, these massive liquidations by this firm have caused the wild fluctuations on NG the last 48 hours. Options on NG are thinly traded, and some of the open interest on certain strike prices could have been held solely by the customers of this firm. This is just an educated guess, not a fact.
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
Ron, are you serious? These guys were selling deep out of the money Options.
What are you quoting, total volumes on all strikes?
100K is nothing as compared to ES Options Vol, and on Feb 5, 2018, some of the OTM options in ES had no Bids/Asks.
Liquidity dries up when a player is squeezed.
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
So if something doesn't have the vol of ES then it is thinly traded?
April NG futures on out were only up less than 10 cents so OptionSellers weren't trading those options. So when I look at Dec thru March I see the most volume on Wed was the March 5.00 call. Traded over 8,500 times. Possibly where OptionSellers were short.
On Nov 5 NGh9c500 traded 2,576 times. OI gained 2,047. Price traded was between 0.041 and 0.062. Option Sellers likes to sell options around $500 premium. 2,000 might be a quantity they would trade. Of course this is purely speculation.
On Nov 14 those options settled at 0.758. Those 2,000+ options' premium went up by $14.3 million if they hadn't exited them. But since OI dropped that day most did but at big losses.
I remember that mid day Wed that March futures were bid over 900 times at the limit up of 30 cents. That probably was people short calls trying to protect them and prevent further loss. If OptionSellers were some of those limit up bids and he was unable to buy futures then that would have prevented him from using futures to buy risk protection. By the time he saw that it was too late to exit the calls without a huge loss.
You are taking my reference out of context.
My point was that OTM options on even the most liquid underlying instruments could run into execution issues.
As for the rest of the analysis, you could be right. The time of their margin call could have made all the difference in their protection strategy and exit.
Matt Z
Optimus Futures
There is a substantial risk of loss in futures trading. Past performance is not indicative of future results.
Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
1 800 771 6748 local 561 367 8686 email [email protected]
In 2016 he said he's been at it for 30 years. He's being careless with his words at a time of great stress. He better lawyer up because he's left a big trail of article, marketing materials and interviews over the years.
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Interesting interview giving an insight into what they do. The doubling of the position when it is up 50% is interesting. When trading a linear instrument, there is a lot of literature, to suggest that adding to winners is how to get exponential profits. But when selling a non-linear instrument like options, you are increasing a position that now has half the profit potential, but the same, potentially even more risk. Also as @ron99 has demonstrated time decay is not even. I personally think his strategy of closing positions at a 50% profit and moving on to the next opportunity (ie with better decay) is a more logical approach.
