Debriefing The OptionSellers Debacle

James Courdier h/t YouTube

Risk/Reward Basics Bypassed In Hedge Fund Blowup

by Steven Sarnoff

Last week, news of a hedge fund blowup spread over financial media.  On the wrong side of sharp moves in energy markets, James Courdier, OptionSellers.com money manager, notified his clients that all is lost.  His Tampa-based options firm sent millions of dollars down the drain.  He put out a pathetic, insufferable, ten-minute apology video, placing blame on a “rogue wave,” which capsized their boat.

No.

His blaming a rogue wave is a tidal wave of baloney.

Checking the markets with a glass of wine isn’t piloting the ship properly.  Successful speculation takes knowledge, discipline, courage, and hard work.

Here are a couple key lessons you can glean from the OptionSellers disaster, so you can avoid getting tossed overboard.

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Shares of SUN Setting

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by Steven Sarnoff

The power of our Superleverage method is shining as shares of SUN (Sunoco) are setting back.

On Sunday, August 21, 2016 I recommended that our Options Hotline subscribers buy the Sunoco September $30 put for $50 or less.  That recommendation was triggered at the opening on Monday, August 22, 2016 for $40, with SUN shares trading at  $30.72.

We call this an “el cheapo” option play, because each option gives you the right to control 100 shares of stock for less than $100.  The reasons the option was inexpensive are that, with SUN at $30 or above, the option had no intrinsic (real) value and there wasn’t much time until expiration (the third Friday in September). Continue reading