Portfolio wiped out in 3 days!

[winnipegjets]

https://www.cnbc.com/2018/11/21/a-r...awry-leads-to-weepy-youtube-confessional.html

 

[Leongsam]

Ho Ching should hire this guy he's a perfect fit.

 

[Ash007]

Won't say its a wipe out. Its still higher then when I brought around 2015. You don't lose or gain any CGT until you sell them!

 

[winnipegjets]

Won't say its a wipe out. Its still higher then when I brought around 2015. You don't lose or gain any CGT until you sell them!

On Nov. 15, OptionSellers sent customers an email entitled "Catastrophic Loss Event" saying that all their money was lost, and they could owe even more to a firm called INTL FC Stone, which handled the trades for OptionSellers.
In a statement on Wednesday, INTL FC Stone acknowledged "unprecedented volatility" in natural gas markets last week that caused "liquidity stress" for some of its customers. "Although well collateralized, accounts managed by a Commodities Trading Advisor, Optionsellers.com, had to be liquidated as a result of these moves," the statement said.

 

[Ash007]

On Nov. 15, OptionSellers sent customers an email entitled "Catastrophic Loss Event" saying that all their money was lost, and they could owe even more to a firm called INTL FC Stone, which handled the trades for OptionSellers.
In a statement on Wednesday, INTL FC Stone acknowledged "unprecedented volatility" in natural gas markets last week that caused "liquidity stress" for some of its customers. "Although well collateralized, accounts managed by a Commodities Trading Advisor, Optionsellers.com, had to be liquidated as a result of these moves," the statement said.

If you buy options without understanding the risk involved you are an idiot! If you had just traded regular shares, unless the company goes bust you can always hold. Not withstanding opportunity cost in the meantime and if it goes back to your buy price.

 

[Asterix]

If you buy options without understanding the risk involved you are an idiot! If you had just traded regular shares, unless the company goes bust you can always hold. Not withstanding opportunity cost in the meantime and if it goes back to your buy price.

From my limited understanding, if one buys options, the maximum one can lose is the premium paid for the option - like insurance.

On the other hand, if one writes options, the loss can be unlimited. For example, writing a call option is granting someone else the right to buy XYZ from you at say $10. If what you wrote is a naked option, ie you don’t have XYZ and must buy it from the open market if the option is exercised, then the potential loss is unlimited - XYZ can go to $100, $1,000, $10,000. But the guy who bought the call option from you, his loss is limited to the amount of premium paid - even if XYZ went to $0.

My guess is that this hedge fund wrote a lot of naked options.

 

[Ash007]

From my limited understanding, if one buys options, the maximum one can lose is the premium paid for the option - like insurance.

On the other hand, if one writes options, the loss can be unlimited. For example, writing a call option is granting someone else the right to buy XYZ from you at say $10. If what you wrote is a naked option, ie you don’t have XYZ and must buy it from the open market if the option is exercised, then the potential loss is unlimited - XYZ can go to $100, $1,000, $10,000. But the guy who bought the call option from you, his loss is limited to the amount of premium paid - even if XYZ went to $0.

My guess is that this hedge fund wrote a lot of naked options.

You probably are more knowlegeable then me on this. All I know is that a lot of people has literally lost a lot of money playing options, with the believe they can earn a lot money playing options. To me the risk are just too great. Options/puts/shorts/margins are essentially gambling calls, not investment.

 

[rushifa666]

Most people are waiting for a crash. These retards eat shit for a living. For china people are waiting for a safe recovery to go in. Dont be an investor if you are a lazy bastard

 

[Gillette]

The guy was selling options on natural gas futures. NG went from $3 in Oct 2018 to high of $4.50 in Nov 2018. He probably sold NG call options and got wiped out.

 

[rushifa666]

fund manager has to risk his neck every day. Normal investor dont.

 

[steffychun]

Sounds like Papsmearer.

 

[syed putra]

Who would want to buy natural gas? Its free of you fart!

 

[winnipegjets]

If you buy options without understanding the risk involved you are an idiot! If you had just traded regular shares, unless the company goes bust you can always hold. Not withstanding opportunity cost in the meantime and if it goes back to your buy price.

The investors just trusted the company to manage their money. The majority of people are clueless about investment and trust the fund companies.

 

[winnipegjets]

fund manager has to risk his neck every day. Normal investor dont.

Fund managers still get paid even when the fund they manage is losing money. That's why I don't buy unit trusts or mutual funds.

 

[winnipegjets]

You probably are more knowlegeable then me on this. All I know is that a lot of people has literally lost a lot of money playing options, with the believe they can earn a lot money playing options. To me the risk are just too great. Options/puts/shorts/margins are essentially gambling calls, not investment.

I like long options ....risk management is vital. With options, the payout is phenomenal if you get it right.

 

[Ash007]

The investors just trusted the company to manage their money. The majority of people are clueless about investment and trust the fund companies.

That is the problem with the Singapore education system. Blindly following what the government says. I recently had a conversation with my dad about CPF. He just said, they guarantee 4-6%, don't have to care what they invest in. I told him a lot of ponzi scheme guarantee 10-20% and some went on as long as 20 years without anyone suspecting. Even pointed out Bernie Madorff. If it sounded too good to be true, don't trust it, ask questions how do they guarantee the percentage rise? What do they invest in? What do they do with risk management, what are the fees etc.

 

[rushifa666]

Fund managers still get paid even when the fund they manage is losing money. That's why I don't buy unit trusts or mutual funds.

Not when you get wiped lol like mr genius