How This One Fund Blew Up Overnight – And What We Can Learn From It - Trading Secrets

“The problem with experts is that they do not know what they do not know.” %u2015 Nassim Nicholas Taleb, Giving you a little background – Mr. James Cordier ran the website OptionSellers.com – a Florida-based investment firm that specialized in writing commodity options for high net-wealth individuals. He’s even authored a book about option selling that’s in its third edition. And all was well for him and his 290 clients – that is until a few days ago. . . Seemingly “out of nowhere” – overnight – investors were wiped out entirely. Some even negative – meaning they actually owe money to the brokerage-house. How did this happen? Well, he blew himself up by selling naked call options on Natural Gas. . . I’ll explain. . . Mr. Cordier with his expert financial opinion thought it was wise to sell naked call options on Natural Gas. The thesis was that the winter was expected warmer than previously thought. And with the over-supplies of Nat Gas coming in from higher prices – Nat Gas would weake

“The problem with experts is that they do not know what they do not know.” %u2015 Nassim Nicholas Taleb, Giving you a little background – Mr. James Cordier ran the website OptionSellers.com – a Florida-based investment firm that specialized in writing commodity options for high net-wealth individuals. He’s even authored a book about option selling that’s in its third edition. And all was well for him and his 290 clients – that is until a few days ago. . . Seemingly “out of nowhere” – overnight – investors were wiped out entirely. Some even negative – meaning they actually owe money to the brok