Perhaps one of the most well-known “secrets” in the managed futures CTA industry is the risk associated with the un-hedged “naked” short selling of options. Author and registered Commodity Trading Advisor James Cordier was the latest causality of a strategy known to “capsize the boat,” resulting in a dramatic loss for clients invested in the strategy. The losses were more than the initial investment, a lawyer representing investors told ValueWalk. Q3 hedge fund letters, conference, scoops etc With a well-documented history of statistical probability resulting in eventual catastrophic failure of the naked short-selling strategy, the real question with Cordier’s loss is…
Short Options Strategy Claims Another Victim: When Will Investors Learn? (Rhetorical Question)
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.