
A Guy on Reddit Turns $766 into $107,758 on Two Options Trades - undefined3840
https://www.bloomberg.com/news/articles/2019-10-17/a-guy-on-reddit-turns-766-into-107-758-on-two-options-trades
======
magashna
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-
mone...](https://www.marketwatch.com/story/trader-says-he-has-no-money-at-
risk-then-promptly-loses-almost-2000-2019-01-22)

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poooogles
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-
mone...](https://www.marketwatch.com/story/trader-says-he-has-no-money-at-
risk-then-promptly-loses-almost-2000-2019-01-22)

~~~
toomuchtodo
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_do...](https://www.reddit.com/r/wallstreetbets/comments/aeqcvt/i_dont_know_when_to_stop/)
(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_...](https://www.theregister.co.uk/2012/08/03/bad_algorithm_lost_440_million_dollars/)

~~~
ssully
What ended up happening to the guy? Did he have to pay that $53k?

~~~
FDSGSG
Based on his post history they closed the account and never contacted him, but
who knows what they might do in the future. Perhaps the debt can/will be sold
to a collector at some point?

[https://www.reddit.com/user/1R0NYMAN](https://www.reddit.com/user/1R0NYMAN)

~~~
toomuchtodo
It's unlikely. They could file a FINRA and SEC complaint. It's cheaper to walk
away from it on Robinhood's part. In my experience interacting with financial
regulators, the conversation would not go well for RH as a broker-dealer.

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

~~~
undefined3840
Not really. Loss porn is equally if not more popular on WSB than gain porn.

~~~
pwinnski
How many of those are on Bloomberg?

~~~
undefined3840
I mean in wallstreetbets. I think a story about a massive literal Wall Street
bet is well within reason for _Bloomberg_ news

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orangepanda
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...](https://www.reddit.com/r/wallstreetbets/comments/agovgl/only_invest_what_you_can_afford_to_lose_they_said/)
SFW

~~~
FDSGSG
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 :)

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imgabe
A million monkies at a million typewriters...

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toomuchtodo
Related Reddit thread:
[https://www.reddit.com/r/wallstreetbets/comments/dj5xru/u_di...](https://www.reddit.com/r/wallstreetbets/comments/dj5xru/u_did_it_autists_youre_on_front_page_of_bloomberg/)

~~~
bhaak
A WSB thread. What else could it have been?

"Choi credited luck". At least he knows it.

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dooglius
> Bloomberg confirmed Choi’s account via screen shots of his Robinhood
> Financial trading history.

That doesn't seem sound...

~~~
close04
It does when you're Bloomberg and touching anything tech related.

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

~~~
undefined3840
Yes. It’s more a story about wallstreetbets and Robinhood.

~~~
spdebbarma
I intake WSB content like any other meme sub.

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preommr
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
>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
[https://www.reddit.com/r/wallstreetbets/comments/bi1dub/wsb_...](https://www.reddit.com/r/wallstreetbets/comments/bi1dub/wsb_trying_to_convince_ujoco645_to_stop_yoloing/)

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fsh
How is a gambler winning some money even remotely newsworthy?

~~~
magashna
It's really an opportunity to talk about the craziness of wallstreetbets

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jacknews
Amazing! Everyone should gamble with options more, because, winnings.

I can't see how Bloomberg could possibly benefit from that.

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mancerayder
Why is this flagged?

