3 ms·

I might have taken this at face value if the houses weren't in LA and Oakland (well, maybe you mean condos, or cash for down payment only). To make that much m

I might have taken this at face value if the houses weren't in LA and Oakland (well, maybe you mean condos, or cash for down payment only). To make that much money (>million?) with 100k means selling massive amounts of naked options. Theoretically it could all work out - but what broker let her take out so much risk?

songzme 10y ago
Yeah. Its an incredible amount of luck. 30-40 naked calls/puts at a time. I'd never do this myself, but time and time again I am still awed at how its worked out over the years. Here's an example: 10 naked puts of Netflix at 95 strike that expires at the end of the week will yield 1k, with a margin req of 10k. Same with calls, thats potentially 2k earnings / week with 20k margin req (very optimal case). If Netflix goes down, she'll short more calls or puts (I forget) that expires at the end of the week. If stock goes in the money, she closes it and opens a new position for the week after so she never exercises the options unless they are too deep in the money. Its all very messy and very crazy, just wanted to share a story of how day trading worked out for my mum.
Blackthorn 10y ago
> Theoretically it could all work out - but what broker let her take out so much risk? Margin rules on options (including naked options) are highly standardized. For naked options, you need a pretty strong stomach. Most of your trades will be winners but it's that overnight black swan event that's going to hurt you.