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Short volitility artist

Hope his acct survived

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#1 merciless

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Posted 10 February 2018 - 05:56 PM

This guy [ was\maybe still is ] a self proclaimed VIX millionaire, a twitter regular, last post Feb 5, this will make a great Business school case study in the future. Hope he wasn't overleveraged. Bulls make money, bears make money and something about pigs

 

 

 

 

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#2 tommyt

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Posted 10 February 2018 - 09:37 PM

Thanks, I guess it was an interesting week for the short vol crowd. We knew this was coming at some point, it was the crowded trade. One big issue that some don't consider with shorting vol and options is your firm and their risk models/team. All is good till its not. I had sold a bunch of premium myself when VIX was >35 this week, and on Friday Think or Swim called me and said "you have to cover your risk, or we will go in at the market and do it for you". The risk guy said he didn't want to negotiate with me, cause they were backed up with  "loads" of customers that they had to cover. Luckily I was able to straighten out my tail before they were going to cover. Normally this isnt a huge deal in "regular" markets, but this week the option world was in crash mode after the XIV fiasco on Monday. Many options I watched had ridiculous markets, $.50 bid at $10. None were coming in for sale, even with 1 day to go till expo. So I couldn't afford to have TorS go in and cover me at the market, $10, could have been a disaster. Was crazy for sure.



#3 cycletimer

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Posted 10 February 2018 - 10:48 PM

Tommy,
Are you talking about CBOE options on the $VIX?

#4 tommyt

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Posted 10 February 2018 - 11:08 PM

No, I stopped trading VIX options years ago when I realized it wasn't a good product with the CBOE the only market maker. Paper was always one way and they punished you on the way out. I saw it in NDX, RUT, AMZN, and GOOGL to name a few. Very twilight zone like with all of them having dump truck wide markets, not much different than '87 and it lasted all week. I was just stating how tricky it is to short any volatility now with risk factors beyond ones control like getting covered at the wrong time/bad prices. Were you trading many options this week cycletimer?



#5 viccarter

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Posted 14 February 2018 - 03:32 PM

Hopefully, the idiot went bust and took his friends/family and "hedge fund" with him.