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Honestly, I find a bit sad how people fail to see the relation of risk/return . The recent DD of this program have nothing to share with adding to losing positions. Perhaps a more intelligent critic would be recent concentration of his positions with TESLA. But let’s be honest here, He is just following his rules, shorting a giant piece of s*** according to fundamental approach. Don’t like that, then follow something other else. But still, even in the light of a -80%, He is way better than 95% of traders populating C2. Reality hurts Boys!
PS: I didn’t mean to specifically address Marekj’s comments which most of the time I agree with…
Interesting, that’s something I didn’t realize was happening. I wonder why that is because expired options are technically closed trades. Good to know.
The 93.2% win rate is not accurate. The system does a lot of option selling and always holds the options till expiration and then takes the assigned stock positions. C2 always counts these trades as winning trades even if the short options expire in the money. The loss is shifted to the assigned stock position. Then the system sells covered options against those assigned stock positions which further create “winning” trades in the C2 statistics.
Despite the size of strategy, this trader’s overall portfolio is likely in the 8 figures and this was just a fun cash cow for him. I’m reasonably certain that he also has a long tsla trade in the rest of his portfolio and is just using the loss from his short tsla in the C2 strategy to harvest tax loss credit. In other words, he never took this strategy seriously and anyone who simply longed apple or sp500 with a bit of leverage would outperform.
Btw, he also made all his excellent gains in the first year shorting volatility which he stopped doing after IB jacked up the margin requirement. Everything since then has been pretty bad risk:reward.
At this point I think he is just winding down the strategy via a suicidal trade since he probably makes six figures weekly in the rest of his portfolio so it makes no sense to keep wasting his time with this C2 strategy. Fun while it lasted but I don’t think any reasonable trader would expect this strategy to end in anything but fiery wreckage.
He said he manages money for a living at a normal job. Doubt he is that susceptible to such behavioural trading traps. And he’s only been trading tesla for the last few months. Definitely winding down the strategy with such strange plays.
These “behavioural trading traps” have been there since the beginning. He didn’t stop trading volatility after 2016. I was a sub of it back then. The first 2 months of 2017 when the system lost 28% in each of them was when he went long TVIX and volatility kept going down in 2016.
By the way the USA tax code doesn’t let you book a tax loss by taking opposite positions in separate accounts ( long & short the same stock). I think when he started the C2 account with $100,000 it was a just part of his assets. After that, the account grew to over $ 2 million.
Many system owners who are “hedge fund workers” have crashed in c2. And so have many hedge funds outside of c2.
Clearly this was not worth investing in to begin with. I can lose this kind of money and enjoy my time with liquor and woman. clearly no risk controls are in place.
This MAP / Medallion guy only knows one trading style: open a trade in an FX pair; if it goes into profit then close it for a small profit otherwise if the trade goes negative then just keep adding to the trade until it turns around.
This guy keeps resetting systems / starting new systems and the same thing happens again! I mean it’s good to be persistent but the guy should at least try a new trading style or maybe read some books on trading.
Just Forex also used to add to losing positions but he used to wait a few days to add more to a position, so he was able to last a few years. This guy keeps adding every 30 min while the trade keeps going against him!
I think the most amazing part of it all is that initially it was very successful and was very popular on C2. I hate to imagine how many people find C2 and don’t last 6 months or a year from falling for things that “look” nice.
I just find all this comical. It’s a free market but if he doesn’t hurt some investors like he did before he’ll just hurt himself financially.
Maybe medallion can rebuttal on this.
That makes a great deal of sense. BUT it is also true for a normal (non-IRA) brokerage account. No brokerage is going to give you unlimited leverage because once you are wiped out, it puts them at risk. Check out the 180 day performance of Put - Equity - Call to see if that leverage strategy is more appealing.
Then you would need to distinguish that scale between asset classes.
In the United States for instance, when regulators imposed a 2:1 leverage on stocks, the required leverage for currencies was 50:1.
The market size and liquidity of the forex market in regards to that of the stock market justified such a difference.
5x leverage on C2 for currencies is rather moderate.
