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A Guy on Reddit Turns $766 into $107,758 on Two Options Trades

61 points by undefined3840 7y ago

toomuchtodo 7y ago
Related Reddit thread: https://www.reddit.com/r/wallstreetbets/comments/dj5xru/u_did_it_autists_youre_on_front_page_of_bloomberg/ https://www.reddit.com/r/wallstreetbets/comments/dj5xru/u_di...
- bhaak 7y ago
  A WSB thread. What else could it have been? "Choi credited luck". At least he knows it.
imgabe 7y ago
A million monkies at a million typewriters...
poooogles 7y ago
If you're after a more interesting trade on reddit thread then ir0nymans box spreads are legendary [1]. Invests $5k and proceeds to turn that into -$57k and ends up banning box spreads on Robin Hood. 1. https://www.marketwatch.com/story/trader-says-he-has-no-money-at-risk-then-promptly-loses-almost-2000-2019-01-22 https://www.marketwatch.com/story/trader-says-he-has-no-mone...
- toomuchtodo 7y ago
  I work in risk management in financial services (and also a /r/wsb lurker, because who doesn't like a little excitement in their life), and this is my absolute favorite story [1] to share about the tech industry running head long into a regulated industry where real dollars are at stake. Not only did Robinhood ban box spreads [2], there were additional risk management positions open the next day on their career site. It cost them at least $100k, which is lucky for them! They extended /u/1R0NYMAN almost $300k in credit (not traditional margin, but counterparty/assignment risk) inadvertently, and the user pulled their remaining $10k cash out while settlement was in flight for the $58k loss. Traditional brokers have no issue automatically managing the risk of this type of option trade, and if something goes sideways they will call you if you exceed trade risk limits. It's not quite Knight Capital [3], but it's still a fun failure/risk management lesson. [1] https://www.reddit.com/r/wallstreetbets/comments/aeqcvt/i_dont_know_when_to_stop/ https://www.reddit.com/r/wallstreetbets/comments/aeqcvt/i_do... (Original wsb thread) [2] https://en.wikipedia.org/wiki/Box_spread_(options) https://en.wikipedia.org/wiki/Box_spread_(options) [3] https://www.theregister.co.uk/2012/08/03/bad_algorithm_lost_440_million_dollars/ https://www.theregister.co.uk/2012/08/03/bad_algorithm_lost_...
  - ssully 7y ago
    What ended up happening to the guy? Did he have to pay that $53k?
    - deleted 7y ago
      [deleted]
    - poooogles 7y ago
      Check his post history, he's still very active on reddit. He's rightfully pretty cagey about it from what I remember. For all parties it's probably best if they just ignore it and pretend it never happened. Robin Hood is liable to some extent as they didn't highlight the risk in the trade.
      - duxup 7y ago
        Reminds me of a banking customer I once worked with. A very complex set of conditions occurred across numerous systems that was legitimately unpredictable. A system I supported looked like it was giving back false data in a seriously bad way that may have resulted in inaccurate data / data loss that may have been undetectable for a long time ... catastrophic if true. All the evidence was from some testing they did, but it lined up with what was seeing as "bad data" in a way that seemed rock solid. Despite all the evidence from their testing it just made no sense to me that what they claim was occurring was in fact occurring based on my experience, and what my own engineering folks I worked with said. So I proposed a test that was pretty laborious but also would absolutely answer a lot of questions. The banking folks being good guys were all for it as they were inundated with executive pressure as there was a real possibility that there were regulatory implications, possibly enormous. So anyway we run the test and everyone reports what they see along the chain of networking equipment and data and so forth. And it comes back completely unexpected nearly every step of the way. It also clearly points to what was a fundamentally bad design an some misunderstandings all along the way. The conference call ended with the bank "We're going to a breakout session with the executive team, please stand by." A few hours later they told us we could go. Thankfully no data damage was done, it was possible someone really fucked up as far as regulatory stuff but it really depended on your POV, and the events were highly unusual / unpredictable. No idea if the bank ever reported it to the feds. Nobody talked about it after that, just as you noted, everyone pretended nothing happened.
orangepanda 7y ago
Was it fool proof? Previously on reddit - a guy on reddit loses $60'000 [1] [1] https://www.reddit.com/r/wallstreetbets/comments/agovgl/only_invest_what_you_can_afford_to_lose_they_said/ https://www.reddit.com/r/wallstreetbets/comments/agovgl/only... SFW
- FDSGSG 7y ago
  It appears this guy actually profited 5k, he started out with 5k and withdrew 10k before his account was closed. As it appears that RH isn't going to go after him for the negative balance, that's free money. So maybe it is foolproof? Even if you lose, you still win :)
lawlessone 7y ago
is this much different than someone winning millions on a 2 euro accumulator bet at a horse race?
- undefined3840 7y ago
  Yes. It’s more a story about wallstreetbets and Robinhood.
  - spdebbarma 7y ago
    I intake WSB content like any other meme sub.
pwinnski 7y ago
Less popular is the other story: Several Guys on Reddit Turn $107,758 into $766 on Two Options Trades.
- undefined3840 7y ago
  Not really. Loss porn is equally if not more popular on WSB than gain porn.
  - pwinnski 7y ago
    How many of those are on Bloomberg?
    - undefined3840 7y ago
      I mean in wallstreetbets. I think a story about a massive literal Wall Street bet is well within reason for Bloomberg news
dooglius 7y ago
> Bloomberg confirmed Choi’s account via screen shots of his Robinhood Financial trading history. That doesn't seem sound...
- close04 7y ago
  It does when you're Bloomberg and touching anything tech related.
- deleted 7y ago
  [deleted]
magashna 7y ago
For everyone of these lottery winners, there's thousands of other idiots in the red. /r/WSB is definitely an entertaining read though. If you want a funnier read at the expense of a company, read about /u/1R0NYMAN basically conning Robinhood by withdrawing $10k before they ate a $53k loss. Subsequently they stopped allowing box spreads. I believe there was also talk that he could sue Robinhood for being so irresponsible with him, but I'm assuming he cut his winnings and ran. https://www.marketwatch.com/story/trader-says-he-has-no-money-at-risk-then-promptly-loses-almost-2000-2019-01-22 https://www.marketwatch.com/story/trader-says-he-has-no-mone...
deleted 7y ago
[deleted]
preommr 7y ago
There are so many fun /r/wsb stories. Just in the past few months there's been 1ronyman, analfarmer and my favorite - well I guess I shouldn't name him in case it violates rules - but some guy that yolo'd his student loans by accidentally buying puts and then tried to convince people he was a good trader. I also just remembered that time someone tried to share his success with SquareSpace and it turned out he'd bought Square stocks instead by accident and didn't even realize it.
- dsfyu404ed 7y ago
  >well I guess I shouldn't name him in case it violates rules Can you provide links or terms to search for those of us who want to read the story?
  - preommr 7y ago
    https://www.reddit.com/r/wallstreetbets/comments/bi1dub/wsb_trying_to_convince_ujoco645_to_stop_yoloing/ https://www.reddit.com/r/wallstreetbets/comments/bi1dub/wsb_...
- poooogles 7y ago
  >analfarmer His trades were just a sad eye on what must be gambling addiction. To go from nothing to $750k dollars in a couple of weeks and then watch him trade it all away over the next 2 weeks was just tragic.
fsh 7y ago
How is a gambler winning some money even remotely newsworthy?
- magashna 7y ago
  It's really an opportunity to talk about the craziness of wallstreetbets
jacknews 7y ago
Amazing! Everyone should gamble with options more, because, winnings. I can't see how Bloomberg could possibly benefit from that.
mancerayder 7y ago
Why is this flagged?

61 points by undefined3840 7y ago

Related Reddit thread: https://www.reddit.com/r/wallstreetbets/comments/dj5xru/u_did_it_autists_youre_on_front_page_of_bloomberg/ https://www.reddit.com/r/wallstreetbets/comments/dj5xru/u_di...

bhaak 7y ago
A WSB thread. What else could it have been? "Choi credited luck". At least he knows it.

imgabe 7y ago

A million monkies at a million typewriters...

poooogles 7y ago

If you're after a more interesting trade on reddit thread then ir0nymans box spreads are legendary [1]. Invests $5k and proceeds to turn that into -$57k and ends up banning box spreads on Robin Hood. 1. https://www.marketwatch.com/story/trader-says-he-has-no-money-at-risk-then-promptly-loses-almost-2000-2019-01-22 https://www.marketwatch.com/story/trader-says-he-has-no-mone...

toomuchtodo 7y ago
I work in risk management in financial services (and also a /r/wsb lurker, because who doesn't like a little excitement in their life), and this is my absolute favorite story [1] to share about the tech industry running head long into a regulated industry where real dollars are at stake. Not only did Robinhood ban box spreads [2], there were additional risk management positions open the next day on their career site. It cost them at least $100k, which is lucky for them! They extended /u/1R0NYMAN almost $300k in credit (not traditional margin, but counterparty/assignment risk) inadvertently, and the user pulled their remaining $10k cash out while settlement was in flight for the $58k loss. Traditional brokers have no issue automatically managing the risk of this type of option trade, and if something goes sideways they will call you if you exceed trade risk limits. It's not quite Knight Capital [3], but it's still a fun failure/risk management lesson. [1] https://www.reddit.com/r/wallstreetbets/comments/aeqcvt/i_dont_know_when_to_stop/ https://www.reddit.com/r/wallstreetbets/comments/aeqcvt/i_do... (Original wsb thread) [2] https://en.wikipedia.org/wiki/Box_spread_(options) https://en.wikipedia.org/wiki/Box_spread_(options) [3] https://www.theregister.co.uk/2012/08/03/bad_algorithm_lost_440_million_dollars/ https://www.theregister.co.uk/2012/08/03/bad_algorithm_lost_...
- ssully 7y ago
  What ended up happening to the guy? Did he have to pay that $53k?
  - deleted 7y ago
    [deleted]
  - poooogles 7y ago
    Check his post history, he's still very active on reddit. He's rightfully pretty cagey about it from what I remember. For all parties it's probably best if they just ignore it and pretend it never happened. Robin Hood is liable to some extent as they didn't highlight the risk in the trade.
    - duxup 7y ago
      Reminds me of a banking customer I once worked with. A very complex set of conditions occurred across numerous systems that was legitimately unpredictable. A system I supported looked like it was giving back false data in a seriously bad way that may have resulted in inaccurate data / data loss that may have been undetectable for a long time ... catastrophic if true. All the evidence was from some testing they did, but it lined up with what was seeing as "bad data" in a way that seemed rock solid. Despite all the evidence from their testing it just made no sense to me that what they claim was occurring was in fact occurring based on my experience, and what my own engineering folks I worked with said. So I proposed a test that was pretty laborious but also would absolutely answer a lot of questions. The banking folks being good guys were all for it as they were inundated with executive pressure as there was a real possibility that there were regulatory implications, possibly enormous. So anyway we run the test and everyone reports what they see along the chain of networking equipment and data and so forth. And it comes back completely unexpected nearly every step of the way. It also clearly points to what was a fundamentally bad design an some misunderstandings all along the way. The conference call ended with the bank "We're going to a breakout session with the executive team, please stand by." A few hours later they told us we could go. Thankfully no data damage was done, it was possible someone really fucked up as far as regulatory stuff but it really depended on your POV, and the events were highly unusual / unpredictable. No idea if the bank ever reported it to the feds. Nobody talked about it after that, just as you noted, everyone pretended nothing happened.

orangepanda 7y ago

Was it fool proof? Previously on reddit - a guy on reddit loses $60'000 [1] [1] https://www.reddit.com/r/wallstreetbets/comments/agovgl/only_invest_what_you_can_afford_to_lose_they_said/ https://www.reddit.com/r/wallstreetbets/comments/agovgl/only... SFW

FDSGSG 7y ago
It appears this guy actually profited 5k, he started out with 5k and withdrew 10k before his account was closed. As it appears that RH isn't going to go after him for the negative balance, that's free money. So maybe it is foolproof? Even if you lose, you still win :)

lawlessone 7y ago

is this much different than someone winning millions on a 2 euro accumulator bet at a horse race?

undefined3840 7y ago
Yes. It’s more a story about wallstreetbets and Robinhood.
- spdebbarma 7y ago
  I intake WSB content like any other meme sub.

pwinnski 7y ago

Less popular is the other story: Several Guys on Reddit Turn $107,758 into $766 on Two Options Trades.

undefined3840 7y ago
Not really. Loss porn is equally if not more popular on WSB than gain porn.
- pwinnski 7y ago
  How many of those are on Bloomberg?
  - undefined3840 7y ago
    I mean in wallstreetbets. I think a story about a massive literal Wall Street bet is well within reason for Bloomberg news

dooglius 7y ago

> Bloomberg confirmed Choi’s account via screen shots of his Robinhood Financial trading history. That doesn't seem sound...

close04 7y ago
It does when you're Bloomberg and touching anything tech related.
deleted 7y ago
[deleted]

magashna 7y ago

For everyone of these lottery winners, there's thousands of other idiots in the red. /r/WSB is definitely an entertaining read though. If you want a funnier read at the expense of a company, read about /u/1R0NYMAN basically conning Robinhood by withdrawing $10k before they ate a $53k loss. Subsequently they stopped allowing box spreads. I believe there was also talk that he could sue Robinhood for being so irresponsible with him, but I'm assuming he cut his winnings and ran. https://www.marketwatch.com/story/trader-says-he-has-no-money-at-risk-then-promptly-loses-almost-2000-2019-01-22 https://www.marketwatch.com/story/trader-says-he-has-no-mone...

deleted 7y ago

[deleted]

preommr 7y ago

There are so many fun /r/wsb stories. Just in the past few months there's been 1ronyman, analfarmer and my favorite - well I guess I shouldn't name him in case it violates rules - but some guy that yolo'd his student loans by accidentally buying puts and then tried to convince people he was a good trader. I also just remembered that time someone tried to share his success with SquareSpace and it turned out he'd bought Square stocks instead by accident and didn't even realize it.

dsfyu404ed 7y ago
>well I guess I shouldn't name him in case it violates rules Can you provide links or terms to search for those of us who want to read the story?
- preommr 7y ago
  https://www.reddit.com/r/wallstreetbets/comments/bi1dub/wsb_trying_to_convince_ujoco645_to_stop_yoloing/ https://www.reddit.com/r/wallstreetbets/comments/bi1dub/wsb_...
poooogles 7y ago
>analfarmer His trades were just a sad eye on what must be gambling addiction. To go from nothing to $750k dollars in a couple of weeks and then watch him trade it all away over the next 2 weeks was just tragic.

fsh 7y ago

How is a gambler winning some money even remotely newsworthy?

magashna 7y ago
It's really an opportunity to talk about the craziness of wallstreetbets

jacknews 7y ago

Amazing! Everyone should gamble with options more, because, winnings. I can't see how Bloomberg could possibly benefit from that.

mancerayder 7y ago

Why is this flagged?