A Guy on Reddit Turns $766 into $107,758 on Two Options Trades
bloomberg.com
bloomberg.com
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-mone...
1. https://www.marketwatch.com/story/trader-says-he-has-no-mone...
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_do... (Original wsb thread)
[2] https://en.wikipedia.org/wiki/Box_spread_(options)
[3] https://www.theregister.co.uk/2012/08/03/bad_algorithm_lost_...
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.
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.
Previously on reddit - a guy on reddit loses $60'000 [1]
[1] https://www.reddit.com/r/wallstreetbets/comments/agovgl/only... SFW
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 :)
"Choi credited luck". At least he knows it.
That doesn't seem sound...
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.
Can you provide links or terms to search for those of us who want to read the story?
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.
I can't see how Bloomberg could possibly benefit from that.